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Update on Tax Reform: Working Towards “Regular Order”

Posted in Budget, Congress, Tax Policy

By Joe Dowley

Joe Dowley served as Chief Counsel of the Committee on Ways & Means, U.S. House of Representatives when Congress last undertook fundamental tax reform.

In the face of many doubters, House Committee on Ways & Means Chairman Dave Camp announced this month that he was establishing a series of subject matter, Member-level working groups to begin his committee’s process of considering comprehensive tax reform in 2013. This week he announced that Speaker John Boehner has reserved the coveted “H.R. 1” number for the bill that, if Mr. Camp has his way, will become tax reform in this Congress. This announcement gave a boost to those rooting for tax reform to happen, although skeptics still abound over the real prospects for any landmark legislation this year.

Aside from the prospects for reform, however, there is something perhaps just as important in the Chairman’s announcement: his working groups will be bipartisan. Each of the eleven subject areas will include a Republican and a Democrat as co-chairs who will work with the Joint Committee on Taxation to identify current law issues and concerns. It is expected that the reports due on April 15th from each working group will reflect a bipartisan look at the technical issues involved, but that may not be the real value in the exercise.

Something very similar was done in 1985 during the development of what became the Tax Reform Act of 1986. The existence of “task forces” didn’t make much news back then because it wasn’t particularly newsworthy.  I was Chief Counsel of the Committee at the time, and although nothing was “normal” with tax reform given its breadth and complexity, the idea of both sides of the aisle working on the issues together was, more or less, “regular order.”

People are fond of saying these days that Congress is ‘dysfunctional.’ Too much ideology – not enough agreement. As a result, as noted above, some folks are pessimistic about the prospects for enacting tax reform in the 113th Congress, and seemingly anything else.

The Administration is in a “work-around mode” with Congress. Both are wrapped around the axle on how to deal with deficits and debt; sequestration is going to happen. As we just saw with passage of the American Taxpayer Reform Act (ATRA) in January, important legislation, if any, seems only to occur at a deadline, in a crisis atmosphere, crafted by a very small group (two, this time) at the top, behind closed doors.  Members of key committees, even some chairmen, often are simply informed of what has happened instead of being in the room helping to shape the result. Relationships that should exist in and around committees are often frayed or non-existent. Then again, who needs relationships if decisions are made by just a few?

Tax reform is really tough to do even when folks get along, and things might seem to be shaping up for what could be déjà vu all over again in terms of the gridlock of recent years.

Hopeless? Maybe not. “Regular order” means participation. It’s hard and tedious, but it can have a transforming effect. Not every issue is or needs to be partisan. Lots of regional, economic and industrial concerns arise in tax reform that don’t relate to party affiliation. Even where strong ideological opposition to proposals exists, if members on both sides have had a real opportunity to participate in the effort – and maybe even get a small piece of the action – some helpful language, for example – in the process – there is bred a sense of investment in the legislation and some understanding of the other side’s position. Sweat equity breeds a level of support. Understanding helps encourage trust and a willingness to compromise, if only a bit. Just as they are in most common endeavors, these are the essential ingredients in the secret sauce of enacted legislation.

More than the well-chronicled lack of civility and good will that clearly exists on the Hill, the departure from “regular order” is a central cause (along with gerrymandered districts) of Congress’ dysfunction. It robs the public of some essential transparency. It disenfranchises and disengages duly-elected members.  As hard and rough as legislating can be under “regular order”, it isn’t nearly as damaging to the institution of Congress as when the process is confined from the beginning to a select few decision-makers in a backroom, backed up against a deadline.

So, here’s to Chairman Camp and his Ranking Member,  Rep. Sandy Levin, for not only persevering on tax reform, but for going back to the future in terms of “regular order.”