Brady to Take Over as Head of House Tax-Writing Panel

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In his first big personnel decision, House Speaker Paul Ryan put the committee that writes U.S. tax law in the hands of Texan Kevin Brady, who agreed to stand aside last year when Ryan wanted that chairmanship.

Brady, who’s finishing his 19th year in Congress, will be in charge of guiding the Ways and Means Committee as it considers whether to revive dozens of tax incentives that lapsed at the end of 2014.

“He’s a proven leader on a lot of our issues,” said Cathy McMorris Rodgers, the Republican Conference chairwoman.

Brady also will be at the forefront of consideration of trade deals such as the Trans-Pacific Partnership -- the text of which is due to reach Capitol Hill any day now -- and will have to manage demands to revise the corporate tax code.

An internal 33-member Republican Party panel chose him over Ohio’s Pat Tiberi; the chairmanship will become official after ratification in a vote by all House Republicans tomorrow.

Ryan’s endorsement of Brady in the meeting “carried a lot of weight” with Steering Committee members, Representative Lynn Westmoreland of Georgia told reporters.

Ryan told colleagues that “from his experience being on the committee he felt like Kevin was the guy,” Westmoreland said. “Seniority plays a significant role on Ways and Means.”

Brady, 60, is chairman of the Health Subcommittee, so he’s already steeped in the issues around the so-called Cadillac Tax, the 40 percent levy on high-cost health insurance plans imposed under the 2010 Affordable Care Act.

If Congress doesn’t change that part of the law, about one-third of employers are at risk of paying the Cadillac tax in 2018 if they don’t adjust their insurance plans, according to Mercer, the benefits consulting unit of Marsh & McLennan Cos.

Every individual and business in the U.S. has a stake in the work of the Ways and Means Committee. In addition to tax and trade policy, it has jurisdiction over the Social Security and Medicare programs.

When Ryan headed the panel, he wanted to use it to craft a major rewrite of federal tax law and bring to an end a yearly practice of last-minute renewals of tax breaks that are too popular to kill but too expensive to make permanent.

This year it will be up to the new chairman to either execute Ryan’s goals or come up with a plan of his own to address what’s known in Washington as the “tax extenders.”

Last New Year’s Eve, Congress renewed more than 50 tax incentives, and if the pattern stays the same another big batch of breaks will come up at the end of this year.

Those include tax breaks for producers of renewal energy, such as wind-generated electricity; a sales tax deduction that’s popular in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming because those states don’t tax income; and a research tax credit that has been used by businesses such as Intel Corp. and Boeing Co., according to Bloomberg Government analyst Danielle Parnass.

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