Ways and Means Chairman Kevin Brady acknowledged in a wide-ranging interview with CQ Roll Call Friday that the highway bill is unlikely to include an international tax overhaul. But the newly elected chairman vowed to continue pursuing the issue and to lay the groundwork for a longer-range tax code restructuring with sweeping rate reductions for business.
The 10-term lawmaker takes the gavel of the influential tax-writing panel at a crucial moment as Republicans seek to present alternatives to President Barack Obama’s agenda and build the case for GOP candidates in the 2016 elections.
“My goal is to relentlessly pursue tax reform, every week, and bring forth the best ideas on a pro-growth, built-for-growth tax code for the committee to analyze,” the Texas Republican said in his Cannon annex office overlooking the Capitol on Friday.
After huddling with Finance Chairman Orrin G. Hatch, R-Utah, on Thursday, Brady said he believed there were still prospects for negotiations on an international tax overhaul, but probably not in the coming conference for the highway bill (HR 22).
“Those talks continue but mainly separate from the highway bill. I want to make sure that those separate discussions continue,’’ the top tax writer said. He referred to bicameral efforts to explore a possible international tax overhaul that could potentially reduce rates on $2.1 trillion in offshore corporate earnings.
While international taxes do not appear to be on the table in the highway talks, both Hatch and Brady have said they remain open to attaching permanent extensions of business tax breaks, including the research and experimentation credit, to the transportation measure this year.
Brady said he wants to prepare for a “Reagan-style reform” of the tax code that would likely incorporate ideas from Rep. Devin Nunes, R-Calif., and others.
With an eye on a broad tax overhaul in the next Congress, Brady said he aimed to reduce the top tax rates – now 35 percent for corporations and 39.6 percent for individuals – with the goal of slashing rates to less than 20 percent for businesses.
“We have to go beyond the 25 percent corporate rate that was set years ago when [former Ways and Means] Chairman Dave Camp began his draft tax overhaul," which was never enacted, Brady said. "That’s because other countries have moved much more aggressively on their top rate. So, I’m convinced we’ve got to take a leapfrog approach on the rates, 20 percent or lower. This is a once-in-a-generation opportunity to become competitive again. So, we can’t squander it.”
Brady echoed Ryan’s call for laying out strong fiscal alternatives to Obama while the GOP works to coalesce around a 2016 presidential nominee.
“The good news is that every serious Republican candidate is laying out their vision of tax reform, which tells you it will be a high priority for them. We’re going to be ready,” Brady said.
If a Democrat replaces Obama, Brady said he would reserve judgment on whether there would be strong prospects for a business tax overhaul. “I don’t know that those odds increase one way or another,” Brady said.
“I think support on both sides of the aisle for international tax reform is growing. I would hope whoever that president is would be a strong advocate too,” he added.
A former Chamber of Commerce executive in South Dakota and Texas, Brady has close ties to the conservative Republican Study Committee.
Brady wants to jumpstart an ambitious timetable for “reshaping the way we reimburse” Medicare providers. The move would follow the physician payment overhaul (PL 114-10) that eliminated the need for perennial “doc fix” bills to avert cuts.
"I am hopeful that we can move a package of hospital reforms, including post-acute reforms and a number of bipartisan health care priorities here over the next six months," he said. Post-acute care is the treatment and rehabilitation that patients receive after a hospital stay or injury.
And he envisioned efforts next year to promote a broad expansion of private health plans within Medicare, which would include language to give seniors a set amount of money to buy coverage. The plan also would combine the Part A hospital part of Medicare with the Part B outpatient services program. Currently, the two programs have separate out-of-pocket requirements for beneficiaries and the government finances them differently.
“That will include combining Part A and B, with an out-of-pocket cap [on patients' costs], make Medicare simpler for seniors, and then offering them an option, a more tailored Medicare plan that works for them. Some people call that premium support,” Brady said.
Brady said he is vetting the text of the Trans Pacific Partnership agreement before deciding on his own potential campaign for its approval next year. He put efforts to promote trade in the context of his broader vision for spurring growth in the gross domestic product, which stood at an annual rate of 1.5 percent in the Labor Department’s third-quarter report.
“A moderate growth target is 4 percent, for sure. I’m convinced if we fix this broken tax code, open up more trade, rebalance regulations, and get people back to work, our economic growth can be well above 4 percent steadily, for the long term,” he said.
He vowed to press forward on his proposal (HR 2912) for a commission to study monetary policy of the Federal Reserve — which he said lawmakers would debate on the floor this month — and for another proposal (HR 2913) to give the central bank a single focused mandate to fight inflation.
The new chairman serves as the designated hitter on the House GOP baseball team, but used a different sports analogy to describe his emerging partnership with Speaker Paul D. Ryan of Wisconsin.
“As speaker, Paul Ryan is really the coach of the conference, and I’m the quarterback of the Ways and Means Committee. My job is to drive our pro-growth agenda down the field and deliver results for both the speaker and our House Republicans,” said Brady.