Senate Finance Chairman Max Baucus, a Democrat who was the lead author of the 2010 U.S. health-care law, said on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that he expects the “bugs” that have plagued the rollout of the health-insurance exchanges will be fixed by Dec. 15, the deadline for Americans to sign up for coverage that starts Jan. 1.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the program with Senate Finance Committee Chairman Senator Max Baucus of Montana. Senator, thank you for being with us today.
MAX BAUCUS: You bet, Al. Good seeing you.
HUNT: Let’s look ahead after this trauma we’ve been through the last couple of weeks. You have worked assiduously on tax reform, corporate and individual, for much of the last year. What are the prospects that you and Dave Camp, your House counterpart, can turn out a piece of legislation in the next couple months?
BAUCUS: I think quite good. We’ve spent years working on legislation. He and I, frankly, meet weekly talking about reform. I and my staff - especially my staff - have spent a good bit of time with the Treasury staff working out details and different ways of configuring provisions. So there’s been a lot of work on reform.
And, second, I think that when the budget conference that’s just been named begins to do its work, it’s going to be - and there’s going to be more likelihood that we’ll find some agreement there.
And, third, because I think there’s a great willingness today to work together better than has been the case in the past.
HUNT: Do you see business and individual tax reform coming up by December?
BAUCUS: I do. I do.
HUNT: Or you would not separate it out and just do business?
BAUCUS: No, I think it should be comprehensive, first, business is clearly important, because we’re - we have to be more competitive. Frankly, the failure to do reform is hurting the economy. There’s no question of that. But I think individuals - well, partly because some businesses are not C corporations - have to deal with the so-called -
HUNT: And when will you -
BAUCUS: - and add to that, there’s a lot of interest - a lot of ways - we have to simplify the code. It’s just way, way too complex.
HUNT: And what’s your goal as when you start to mark up a bill and when you report out a bill in the Senate?
BAUCUS: Well, I’d like to see us come up with discussion, quick drafts, the beginning of this year. I don’t know exactly when. I can’t give a date on markup, but we have to move quickly, because time is soon not becoming our friend.
HUNT: Well, then, tell me, how does it fit into the budget pact - or deal which has to be done by Dec. 13?
HUNT: Can what you’re going to do play into that? Or does it have to be done later and separately?
BAUCUS: I think it’s a parallel track. I think Patty Murray and Paul Ryan are terrific. They both know budget process very well. They both know what the components are. And I wish them very well. They’re both very good people. I’m working with them. I’m working with Senator Murray, and I’ll be working with all members of that committee to help with the tax components and also the entitlement components -
HUNT: So what you may do is they may have numbers, they may use numbers that you have and then you fill in the details and the specifics later?
BAUCUS: Right. Yeah, the thought is, they’ll do top-line numbers, then we do the details.
HUNT: Will your tax reform be a net revenue gainer or will it be a - will it be neutral?
BAUCUS: Well, that’s a question that’s going to have to be resolved in the budget.
HUNT: What does the chairman think right now?
BAUCUS: I think that that’s one of the pieces that is part of the solution, that’s part of the puzzle. And it’s revenue, sequestration, it’s entitlements, and there - to be honest, they all have to be on the table -
BAUCUS: I’m saying, everything’s on the table. We got to work together here.
HUNT: Do you think you’ve got revenue out of it?
BAUCUS: I think that we’re going to - I’m moving as fast - as thoroughly as I can to solve this. And I think it’s important for us to listen to each other, to build bridges and try to avoid some of these buzzwords that have been going around Washington which tend to get blamed.
HUNT: Let me try one more crack at that. Would business tax reform be revenue-neutral and the question then be whether individual tax reform is revenue-neutral?
BAUCUS: Well, the president’s corporate framework is revenue-neutral.
HUNT: Right. Would you -
BAUCUS: Well, anything’s possible. It’s early. We’ll -let’s see where we go.
HUNT: Are you going to, in the business tax reform, would you imagine putting a charge, 5 percent or more, on the earnings held offshore by multinationals as of right now? Is that a likelihood?
BAUCUS: I think we need - this country needs business reform that addresses overseas so-called trapped cash in a way that allows companies to bring that cash home, but in a way that also is durable, that’s not just a one-off, but is a permanent solution to income earned overseas that unfortunately some companies don’t pay taxes on because their operations are in tax havens or low tax jurisdictions. And that’s going to help create jobs in the United States.
HUNT: They want the lower rates, but they don’t want the broader base.
BAUCUS: Well, I - you know, that’s not - no, no, no.
BAUCUS: No, no, no. Companies over and over come to us and say -
HUNT: What do you think you can take the rate to?
BAUCUS: I’d like to get the rate down to 30, high 20s.
HUNT: High 20s or 30s?
BAUCUS: High 20s, into there. Companies tell us they want to - they’re willing to give up the major deductions they get to get lower rates, because they feel they’re more competitive with lower rates. Let me - one small example here. A major California company just merged with a major Japanese company, computer manufacturing equipment, and where do you think they incorporated? Overseas, in the Netherlands. Why? Because the Netherlands rate is so much lower than it is in the United States.
HUNT: What could you get the individual rate down to in an ideal world?
BAUCUS: I don’t know. I don’t know. It’s - that’s -
HUNT: Do you think you can get it below 30?
BAUCUS: Look, it’s hard, because there are a lot of provisions that people like a lot, whether it’s charitable deduction or mortgage or state and local, whatnot. But, still, I do believe that we can dramatically simplify the code. It’ll send a very powerful message to the country. Hey, Washington’s got its act together, and it’ll unleash a lot of pent-up energy that’s not yet been realized to help create jobs.
HUNT: Let me see if I’ve summarized this correctly. You think there are numbers that can be provided to the budget conferees before December 13th, and the actual legislation probably would go to the floor early next year?
BAUCUS: Well, I’m hopeful. I’m not going to say that’s what’s going to happen.
HUNT: But it will go to the floor next year?
BAUCUS: No, I’m making a different point. I’m saying, I’m working to - with the Budget Committee to get the most definitive framework the country could get. Failing that, I’m still proceeding independently on reform.
HUNT: Mr. Chairman, another matter. With prescience, you warned that the Affordable Care Act was a train wreck or potential track wreck. Republicans cite that often. The early rollout seemed to be at least that, if not more. I want to ask you this: Do you think this is intractable, that this is going to get worse? Or do you think it can be rectified in the next couple of months?
BAUCUS: Well, first, I said, if they don’t get their act together, it’s going to be a train wreck.
HUNT: They haven’t, have they?
BAUCUS: There have been problems. But anything this massive - this is huge - is going to have bugs. And we’re seeing bugs. Look at the private sector. You’ve got - you know, you’ve got - a technology company and a software company, Windows, for example, 2.0, 2.1, all that, there’s -there are a lot of patches that fix the bugs. And that’s what’s happening.
I have the utmost confidence that every amount of energy is being devoted to solving - getting these patches out to fix the bugs. And we’re an entrepreneurial - we’re a creative company. We’ll find a way.
HUNT: Do you have confidence that those glitches will be largely rectified by December 15th?
BAUCUS: I do. I do. I do.
BAUCUS: I’m talking - I spent a lot of time talking to the administration on this. I met with Denis McDonough twice a month. We go over - this is what we go over, frankly, unless it’s some tax reform issues and other -- and they bring members of Congress to him so that they - he hears and they hear what needs to be done here.
HUNT: Final question. The IRS commissioner, the appointment has been pending for two-and-a-half months. When are you going to hold hearings? And when will John Koskinen be confirmed, if he will?
BAUCUS: Well, so far, I think he’s a good man, and I’m going to do my very best to get the hearing up right away. And my job is not let others link his - hearing for him -
HUNT: Do you think he’ll be confirmed this year?
BAUCUS: I do. And I’m going to do all I can to make that happen. He’s a good - the IRS needs a very good man. It looks like at this point, any other developments, that he’s a good man and should have that job.
HUNT: Chairman Baucus, thank you so much for being with us.
BAUCUS: You bet.
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