Lobbyists: Max Baucus' Retirement Isn't a Game Changer for Tax Reform

Chris Frates
National Journal

The day after Senate Finance Committee Chairman Max Baucus announced that he would not run for reelection, the panel met behind closed doors to talk tax reform. “You’d better be ready to work. I’m doubling down,” an aide recalled Baucus telling members last week.

But is Baucus’s retirement announcement a game changer for tax reform? Not really, say some Washington lobbyists who are paid handsomely to handicap legislative action.

“I don’t think the landscape has changed because of Baucus’s announcement. He’s got 18 months to get it done, and he had 18 months to get it done before,” said Jade West, a top lobbyist for the National Association of Wholesaler-Distributors. “I don’t think Senator Baucus’s retirement changes the equation at all.”

There are two schools of thought on how Baucus’s exit could influence the outcome of tax reform. The optimists see legacy as the driving motivator. In addition to the Montana Democrat’s retirement, Republican House Ways and Means Committee Chairman Dave Camp, R-Mich., is serving his last term running the powerful tax-writing committee. The two men, who meet weekly to talk reform, both badly want to achieve the lasting legislative legacy of tax reform.

And they have been laying the groundwork for years. Baucus and his committee have held hearings with stakeholders and begun producing papers that lay out the challenges and potential solutions on an array of tax questions. Sensing that this summer’s fight over raising the debt ceiling may be the best opportunity for tax reform, Baucus is working to position his committee as the central bipartisan proving ground for legislation.

In the coming weeks, Baucus and Camp intend to begin soliciting Americans’ input on tax reform through social media. And on the House side, Camp is trying to sell tax reform to small groups of his Republican colleagues.

David Castagnetti, a Democratic lobbyist and former Baucus chief of staff, said the retirement news slightly increases the odds of passing tax reform.

“The game changer is, he can spend more time working on tax reform because he doesn't have the pressures of running for reelection so he can spend more time on the substance, more time on the details of how do you get a deal done,” Castagnetti said. “He always wanted to get it done so I’m not sure it changes his perspective.”

The pessimists—or more accurately, those who side with the status quo—don’t believe that the Baucus news shifts the political dynamics enough to make a difference. Democrats and Republicans are at odds over some of the basic goals of tax reform. Democrats want to raise revenue while Republicans want to cut taxes and spending.

Moreover, tax reform is just one item on a crowded legislative agenda packed with gun control, immigration reform, and farm and highway bills. Not to mention that Sen. Ron Wyden, D-Ore., the next in line to chair the Finance Committee, has his own tax-reform ideas.

“I don’t necessarily believe it moves the needle in terms of getting it done,” said one Democratic lobbyist of Baucus’s announcement.

A Republican K Streeter added, “There’s still a great deal of skepticism whether you can get a bill done, because very few people downtown think the administration wants to get a tax-reform bill done. And getting a tax-reform bill is extraordinary challengingly, even when people do want to get it done.”

Despite the work that’s already been done, the effort is still in its early stages. “If tax reform were really balls-to-the-wall right now, you’d see more grassroots spending, more advertising in districts than you do now,” the GOP lobbyist said.

There’s also the idea that Baucus could lose members of his expert staff at the very moment he needs them to help craft reform efforts. While an exodus of staffers often follows a retirement announcement, lobbyists don’t expect Baucus’s staff—particularly the tax experts—to flood the market just yet.

Most firms have already staffed up for this round of the tax battles, many with the former Baucus staffers already for hire. There’s also the one-year lobbying ban many staffers would face after leaving the Hill. However, many lobbyists point to another, more important reason. Like their boss, current Baucus staffers likely want to be part of the team that achieves tax reform. If it passes, senior Baucus staff and tax experts will be in demand to help implement the law they helped draft. And if it fails, good tax minds are always in high demand.