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Tax working groups begin talks with hope

February 27, 2013

The tax reform working groups commissioned by House Ways and Means Chairman Dave Camp won’t produce landmark legislation, but they might create something equally important to an eventual Tax Code rewrite: trust.

That’s the theory, at least.

Lawmakers have been mulling a comprehensive overhaul of the Tax Code for years. But with Democrats accusing the GOP of sacrificing the middle class to protect millionaires, and Republicans charging that Democrats wanting to bankrupt Americans with tax hikes, there hasn’t been an overabundance of goodwill.

Some lawmakers think the working groups, which met for the first time Tuesday in 30-minute sessions to outline their agendas,  could change that, by helping to build relationships ahead of the fraught process of reform.

“The tone is one of cooperation,” Rep. John Larson (Conn.), the Democratic chairman of the financial services working group, said of the groups. “It is vitally important to restore regular order and to get people in the mindset of working together. More than any single item, that in and of itself is a salient accomplishment.”

Camp (R-Mich.) called the working groups “a way to come together,” on Tuesday, noting that each has a Republican and Democratic leader.

“Trust is the essence of things — your word has to be good, and in private meetings you’re more likely to get it,” said Rep. Jim McDermott (D-Wash.).

But the groups aren’t all about creating a kumbaya atmosphere.

Lawmakers will also be soliciting opinions from powerful outside groups as part of their small-group deliberations.

Larson said he expects to hear from insurance groups — a large employer in his Hartford, Conn. district. And Vern Buchanan, a Republican from Florida who is who co-chairing the small business working group, said his panel will solicit opinions from local groups and lobbying heavyweights like the National Federation of Independent Business and the U.S. Chamber of Commerce.

“We are going to bring in associations and groups … to talk about their thoughts and ideas,” he told POLITICO. “At the end of the day we’re trying to understand the code and get some thoughts and recommendations.”

But Buchanan says he and his group’s top Democrat, Allyson Schwartz of Pennsylvania, will have an “open mind” for all proposals.

“We’re seeing if we can come up with something that makes sense that we could actually get done in term of tax reform, but I know to do that we’ve got to work together,” Buchanan said. “We need to work together — that is what I’m hearing from everybody. Washington isn’t working, it is broken and we’ve got to find a way to work together. We’re going to try and set an example for Washington … hopefully with what we’re doing here with the [working groups].”

The groups will disband in April — so time is of the essence. Each group will either sit down with the Joint Committee on Taxation or request information from the bipartisan committee on the topics.

Congress can forget about tax reform if Republicans and Democrats don’t have a solid working relationship, says McDermott. And right now, McDermott says, they don’t.

“Nobody trusts anybody right now,” the Democrat from Washington told POLITICO.

McDermott is pessimistic that tax reform will actually happen, but said these private working groups could help foster the personal relationships needed to get tax reform moving, since lawmakers don’t have to worry as much about “gotcha” moments in closed-door talks.

While two months of meetings likely won’t fix the centuries-old tradition of partisanship, Schwartz said the groups are “a good starting point” for the Ways and Means Committee.

“We’re certainly going to try to find some common ground,” she told POLITICO. “Where we get to at the end of the day, I don’t know … but we’re talking to each other and that’s a good thing.”

When announcing the 11 working groups last month, Camp said each would compile feedback from stakeholders, think tanks, practitioners and other politicians on the topics — which range from charitable giving to debt to energy — to present to the full committee.