House Speaker Paul D. Ryan vowed Tuesday that Congress will approve a broad-based overhaul of the federal tax code this year, laying down a firm deadline for Republicans as he tries to smooth over intraparty differences that have plagued the effort thus far.
The White House on Tuesday also endorsed an aggressive timetable. Vice President Mike Pence said Americans can expect the largest tax cut since the Reagan administration by the end of the year.
However, Mr. Ryan said the reform package must be permanent, which could force Republicans to obey parliamentary rules that would constrain the size and scope of the overhaul.
Setting an optimistic tone, Mr. Ryan said neither policy spats nor controversies involving President Trump will derail Republican objectives. Speaking to the National Association of Manufacturers, Mr. Ryan didn’t try to solve the policy disputes, but instead looked to infuse fresh energy into the process and to reassure corporate leaders who have begun to doubt Republicans’ ability to deliver on major campaign promises.
“We are going to get this done in 2017,” the Wisconsin Republican said in what his office billed as his first major speech on the issue. “We have to get this done in 2017. We cannot let this once-in-a-generation moment slip by.”
Mr. Ryan said “defenders of the status quo” are counting on lawmakers to lose their nerve or delay the effort to lower individual and corporate income tax rates.
He said one reason to make the reform permanent is to avoid the experience of the Bush-era tax cuts, which expired after a decade.
“Businesses need to have confidence that we won’t pull the rug out from under them,” he said.
But significant disputes remain. One of them is a trillion-dollar border tax favored by Mr. Ryan that has met a cool reception from the White House, Senate Republicans and even some in the House Republican conference.
Mr. Ryan said in a CNBC interview after his speech that the “border adjustment” tax isn’t dead, but he acknowledged that a full, immediate 20 percent tax on imports wouldn’t work.
“What we’re doing right now [with] the tax writers is we’re just comparing and contrasting various versions of reforms to get the best possible one that gives us the lowest possible rates and the most internationally competitive tax system, and [the] best one we can pass,” he said.
The border tax is attractive to some because it would produce a massive amount of revenue, giving lawmakers more space to cut tax rates. But retailers and importers say it would add 25 percent or more to the cost of many goods sold in the U.S., which they warned would hit consumers and sour the economy.
Even some conservatives who are largely on board with Mr. Ryan’s broader efforts say the speaker needs to let go of the border proposal.
“The border adjustment tax is really dead, and it’s up to us to make sure that we put forth a proposal that does what we said we would do,” Rep. Mark Meadows, North Carolina Republican and chairman of the conservative House Freedom Caucus, said Tuesday on Fox Business Network.
Some analysts had expected Congress to be further along in settling the policy disputes on tax reform. Conservatives have floated the idea of canceling the August recess to try to make headway.
The White House said those decisions are up to Congress, but press secretary Sean Spicer said a bipartisan consensus for action seems to be emerging.
Still, the schedule is crowded. The Obamacare repeal effort is taking most of the energy on Capitol Hill, and lawmakers are investing time in investigations of the Trump administration.
This fall, Congress will have to deal with the government’s debt ceiling as well as the annual crush of spending bills.
Democrats say they fear a skewed package will emerge from Republican negotiations and that Mr. Ryan papered over problems on Tuesday.
“He did not tell them that under their plan, an individual in the top one-tenth of 1 percent of income gets a $1.4 million tax cut while a middle-income household receives barely $60,” said Rep. John A. Yarmuth of Kentucky, the ranking Democrat on the House Budget Committee. “And he conveniently left out that their plan would grow the debt by $3 trillion.”
Democrats have hinted that they may try to block a debt limit increase if they don’t like the Republicans’ proposed tax cuts.
“If they’re going to put on the table a massive tax cut for the very wealthy that increases the deficit by trillions, it’s harder to get Democrats to increase the debt ceiling,” said Senate Minority Leader Charles E. Schumer, New York Democrat.
That would be a stunning reversal for Democrats, who under President Obama said the debt was sacrosanct and the limit should be raised without preconditions.
• David Sherfinski can be reached at dsherfinski@washingtontimes.com.
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