–Senate Finance Chairman Says Accord Is Needed On ‘Long-Term Plan’
–‘Must Address’ Key Fiscal Issues By End of Year
–‘Making Progress On a Detailed Tax Reform Proposal’

By John Shaw

WASHINGTON (MNI) – Those hoping that Senate Finance Committee
Chairman Max Baucus would use his heavily promoted tax reform speech
Monday to outline his future tax reform agenda or even suggest how
Congress might deal with the coming fiscal cliff are most likely to be
disappointed.

In a speech to the Bipartisan Policy Center on tax reform, Baucus
offered cautious and general comments that appeared more designed to
avoid limiting his options in the future than in charting a new course
on tax policy.

On the short-term question of the fate of the expiring Bush era tax
cuts, Baucus tried to broaden the debate and sidestep the immediate
issue.

“Much of the talk in Washington these days is focused on the
so-called fiscal cliff,” Baucus said.

“We need to address those crucial spending and tax decisions by the
end of this year. We must reach an agreement on a long-term, balanced
deficit reduction plan,” he said.

When asked to comment on proposals to extend the Bush-era tax cuts
for six months or a year while work continues on broad tax reform,
Baucus said there is a danger that a tax reform consensus might not be
ready in this time frame and that extending expiring tax cuts would
worsen the deficit.

Republican leaders in Congress have coalesced behind a call to seek
a one-year extension of Bush era tax cuts.

Baucus said there are informal conversations underway in Congress
on a deficit reduction package that would be of the same size of the
Simpson-Bowles plan that calls for about $4 trillion in deficit
reduction over a decade.

But he did not say how he hoped this plan would be offered in the
context of the fiscal cliff deadlines.

In his remarks on tax reform, Baucus declined to offer a specific
proposal or even discuss his general approach with much detail.

He said tax reform should focus on boosting job growth, increasing
U.S. competitiveness, bolstering innovation, and providing future
opportunities.

“Tax reform is a once-in-a-generation opportunity. We can cement
America’s preeminence,” he said, adding that he’s “making progress on
a detailed tax reform proposal that will attract bipartisan support.”

Baucus said the U.S. tax code is “growing out of control” and
Congress has made more than 15,000 changes to the code since the last
major tax reform was enacted in 1986.

“Our tax code hasn’t kept up and now it’s acting as a brake on our
economy when we need to move at full speed. It’s time we had a tax code
for the 21st century,” he said.

** MNI Washington Bureau: (202) 371-2121 **

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