July 23 (Bloomberg) -- The Senate Finance Committee will consider revamping the U.S. tax code this year, Chairman Max Baucus said today, proceeding without a bipartisan agreement on whether the plan should raise additional revenue.
Baucus’s comments were his clearest yet about the timing of committee action on a bill, which hasn’t been released, that would lower tax rates and broaden the tax base. Baucus, a Montana Democrat, said he intends for the proposal to be a bipartisan one.
“We have to reform the code,” he told reporters today in Washington. “We’ve got to do our work.”
Baucus’s plan for committee action this year matches efforts in the House of Representatives by Ways and Means Committee Chairman Dave Camp, a Michigan Republican. Baucus and Camp have started a national tour together in support of a tax rewrite.
The effort faces a series of obstacles, including entrenched interests defending their tax breaks and a partisan divide over how much revenue should be raised from federal taxes. Democrats insist on more revenue to help reduce future budget deficits. Republicans reject that idea and say the deficit should be reduced only through spending cuts.
Rob Leonard, a tax lobbyist at Akin Gump Strauss Hauer & Feld LLP in Washington, said Baucus must lay out a complete proposal that best reflects his sense of where he can find consensus on the Finance Committee, which has 13 Democrats and 11 Republicans.
“A chairman usually does not -- and in this case won’t -- go into a room with a lot of surprises,” said Leonard, a former House Democratic staff member whose clients include United Technologies Corp. and the Private Equity Growth Capital Council.
“I certainly hope that he can get there,” Senator Charles Schumer, a New York Democrat on the Finance panel, said of the prospects for committee action. “There are a lot of questions that have to be answered, above all, revenues.”
Baucus, who supports raising additional revenue through a tax rewrite, said when asked about a target figure: “We’ll talk that through in the committee.”
Senate Republican leader Mitch McConnell of Kentucky said a revamped tax code would be “good for the country,” while he rejected Democrats’ proposal for additional revenue.
“I have no interest in re-opening the subject of additional taxes,” McConnell said.
Baucus and Orrin Hatch of Utah, the top Republican on the Finance Committee, have asked senators to submit ideas for tax changes by July 26. They said they are starting with a clean slate and are seeking justification for restoring any tax breaks.
Baucus has his own deadline. He isn’t running for re-election and will leave Congress Jan. 3, 2015.
Senator Pat Roberts, a Kansas Republican, said the Finance panel should start with miscellaneous expiring provisions and work from there as lawmakers navigate “serious” differences on policy.
“We just have to sit down and start to work, so we’ll see,” Roberts said. “It’s a work in progress, but it’s a serious work.”
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