Washington Insider: Tax Reform Timelines Appear Optimistic

Informa Economics is commenting on the range of differing views on when tax reform can be expected, and the guesses range from yet in 2017 into 2018. The failure of the U.S. Senate to come to agreement on a healthcare reform plan is still fresh in Washington. While attention has quickly shifted to taxes, the range of timelines that various players are offering is nearly as broad as the options for tax reform itself.Nevertheless, the White House says it expects tax reform legislation to move through Congress this fall, advancing through the House in October and clearing the Senate in November, according to legislative director Marc Short.That appears to be an optimistic timeline, many veteran congressional analysts say. Markups would start in September, Short said. "So that, I think, is an aggressive schedule but that is our timetable,” he remarked, noting that even some Democrats could come to back the effort, particularly those up for reelection in 2018.There are others in the 2017 camp who think tax reform could be completed in Congress in September and signed into law within a month. Americans for Tax Reform founder Grover Norquist told Bloomberg. And, Senate Majority Leader Mitch McConnell, R., Ky., said Tuesday he sees the effort being completed by the end of 2017.The view that it could stretch into 2018 is held by House Ways and Means member Rep. Peter Roskam, R-Ill., who said it does not have to be done yet in 2017. "I’m not somebody who says it’s got to be done for sure by the end of 2017, but you’ve got to know where you’re going to land by the end of 2017 otherwise this basically becomes the fish that will have gotten away,” Roskam told Bloomberg. However he has previously echoed sentiments of others like House Speaker Paul Ryan, R-Wis., who have said it has to happen in 2017 or get snarled by the 2018 elections.There are other factors at play. Senate Finance Committee member Chuck Grassley, R-Iowa, said it almost has to get done in 2017 in order to give the IRS time to get things ready for taxpayer filings to start in January. "It’d better be," Grassley said, when asked if the legislation could pass by November. "It’s almost got to be signed by the president by that time because IRS has to have that much time so you can file taxes in January."Are the legislative tools in hand? Republicans have eyed using budget reconciliation to get the measure through, a path that would almost assure there being little if any Democratic help. Grassley indicated the plan could move without support from the other side of the aisle, but tax reform is certainly a chance to find some bipartisanship.If Republicans still want to use reconciliation to push a tax code overhaul, they first must pass a Fiscal 2018 budget resolution to authorize it, and that could take some time to accomplish. Rep. Mark Meadows, R-N.C., chairman of the ultra-conservative House Freedom Caucus, has warned the measure lacks majority support in its current form. House Budget Chairwoman Diane Black, R-Tenn., said she was still rounding up votes for the resolution, but said the elimination of the border tax “does help me a little bit.”In addition, there are several other fights that could spill over and complicate the aggressive tax timeline: Keeping the government funded beyond September 30 and raising the debt limit are two, observers say. Both are decisions that will also present challenges for lawmakers.Informa says lawmakers and the White House are clearly laying out an aggressive agenda and timeline on tax reform, given the laundry list of items still be to accomplished and the record so far. That puts a "prove it" situation ahead for lawmakers who have had difficulty in reaching agreement – with the exception of Russian sanctions legislation. Republicans, as well as Democrats, often dream of a tax reform plan that can have that kind of support, but it isn’t likely. Informa reminds that the last major tax reform was in 1986, more than 30 years ago in a very different, bipartisan Washington.So, we will see. It is clear that the basic preferences among lawmakers differ widely, and have been very difficult to bridge. This issue may be more amenable to a deal, but the agendas being discussed likely will be a challenge, Washington Insider believes.