A strategy by House Republican leaders to bottle up revenue bills until a comprehensive overhaul of the tax code is finished is being sold to GOP lawmakers as a tactical way to hobble Senate Democrats.
The Constitution requires revenue measures to originate in the House, but once the Senate receives those bills, they can be used as a vehicle for its own tax priorities. By withholding revenue bills – the House Ways and Means Committee has not passed any this year – House GOP leaders can starve the Senate.
Yet some critics say the strategy is merely political cover for House Republicans, who fear they don’t have enough clout within their own conference to pass some needed revenue bills. Bottling up the bills, they say, avoids the embarrassment of defeat on the House floor.
“The idea that they’re not going to move any revenue bills until a comprehensive tax-reform bill is done is an excuse to not do any legislating,” one senior House Democrat aide said. “We’ve seen that in just the first three months of this year.”
While House Republican leaders are pointing to the potential use of these bills by Senate Democrats to advance tax hikes and other measures that Republicans oppose, the no-revenue-bills strategy is holding even for popular legislation. Some of the stymied measures passed the House last year.
One such bill would repeal a 2.3-percent excise tax on medical devices enacted in 2010 to help pay for health reform. That bill remains frozen in the House, despite having 212 bipartisan cosponsors. Moreover, just last week, the Senate, in a symbolic move of support for the legislation, voted 79-20 to repeal the tax as part of the chamber’s 2014 budget resolution.
That bill’s sponsor, Ways and Means Committee member Erik Paulsen, R-Minn., says he’s been pushing leadership hard for a vote, either separately or as part of another tax initiative. “Jobs are being shed and lost as we speak,” he said.
But Paulsen said that even though he has laid out the need for action, House leaders have expressed concern about sending a revenue bill to the Senate. Paulsen said the House will have to first secure a commitment from Senate Democrats that they would address the medical-device tax specifically, and not other priorities.
How long various House revenue bills may remain in limbo is uncertain, largely because the chamber's leaders have pegged the strategy to a comprehensive tax-code overhaul—a massive project with an uncertain future. Ways and Means Chairman Dave Camp, R-Mich., is overseeing that effort in the House. There is growing speculation that the entire process could extend into 2014.
Aides to Speaker John Boehner and Majority Leader Eric Cantor would not discuss the Republican strategy or whether any revenue bills will make it to the House floor anytime soon. Boehner spokesman Michael Steel referred questions to the majority leader's office, which controls the floor schedule, but Cantor aides did not respond.
Still, the strategy has been acknowledged publicly at least once in recent days. At a Tax Executives Institute conference in Washington last week, E. Ray Beeman, tax counsel to the Ways and Means Committee, said on a panel discussion, “We don’t anticipate moving any revenue measures through the House before H.R. 1 moves through,” according to those in attendance. H.R. 1 is the bill number that Boehner has set aside for tax reform, a signal that it is a top priority.
Beeman, who is assigned to work almost exclusively on tax-code reform efforts, declined to elaborate on his comments when contacted this week. But Ways and Means spokeswoman Michelle Dimarob said, “Chairman Camp has long said that he is focused on moving a comprehensive tax-reform bill as opposed to ‘one-off’ revenue shells, which is in keeping with the perspective others in leadership expressed earlier this year.”
Also attending the Tax Executives Institute conference last week was Nicholas Giordano, a former chief tax counsel for the Senate Finance Committee who is now a Democratic tax lobbyist. He said the Republican strategy could delay House action on dozens of temporary tax provisions that are due to expire at the end of the 2013.
At least 55 expiring tax provisions are on that list, involving incentives or credits in areas ranging from research and development to film and television production, according to a January report by the Joint Committee on Taxation. In the past, Congress has approved legislation, retroactively renewing extensions after their deadlines have passed. But delay creates uncertainty for the businesses and individuals affected.
Dimarob, the Ways and Means Committee spokeswoman, downplayed concern over these and other revenue bills. “A major goal of tax reform is to make the code simpler and fairer so that it can provide greater certainty,” she said. “So, tax provisions, whether extenders or otherwise, all ought to be reviewed with that goal in mind.”