Rep. Kevin Brady knows the Republican tax reform framework released Wednesday is ambitious.
The Texas Republican knows it’s going to be a heavy lift. He’s cognizant of the Senate’s latest failure on health care, just this week, and the lack of major legislative wins this year. And he’s aware of criticism that President Donald Trump isn’t able to focus on anything for long enough to see it through.
He’s still optimistic.
“I’m awfully confident because of today,” Brady, the chairman of the House tax writing committee, said in a sitdown with CNN in his Capitol Building office shortly after Trump finished his first campaign-like appearance to sell the plan in Indiana. “Look, it’s a bit historical that you’ve got the President, the House and the Senate together on the same page on the big issues, and then we will write to this framework.”
Brady’s optimism is a regularity on Capitol Hill — reporters who have been pelting him with detailed tax reform questions rarely get him riled on much — but so is his recognition of the stakes and difficulties ahead.
Brady, as chairman of the ways and means committee, was also a central player in the GOP efforts on health care, which went up in flames, again, Wednesday. He says he’s taken two key lessons: unify the Senate, House and White House early, and that nobody actually likes the current tax code.
“The American public, you know they are genuinely divided on whether Obamacare works for them or not,” Brady said. “But there is no one out there defending the current tax code.”
The ability to swing public support in the GOP’s favor on the issue will be crucial to the effort, and heavily shouldered by Trump. In that, Brady says, Republicans “start from a completely different position, I think, than in health care.”
But Brady is also fond of reminding people there’s a reason a major tax overhaul hasn’t been done in 31 years. And in many ways, it’s that effort — in 1986, under President Ronald Reagan — Brady says he wants to mimic as he prepares to launch his own legislative effort.
Skeleton of a plan unveiled Wednesday
The nine-page, far-reaching framework released Wednesday laid out the skeleton of what is to become his final proposal, with a significant cut to the corporate tax rate, a collapse of the individual rate from seven brackets to three and major incentives for business investment.
It’s a plan still sketchy on the most important details — something Brady readily acknowledges — but one that he doesn’t plan on diverging from. His panel will fill in the details on the House side, the Senate finance committee will do the same on theirs, then the two versions would be reconciled. Finishing it all by year’s end remains the timeline. Asked if he had any explicit red lines as the legislative process kicks off, Brady responded: “This framework is exactly where it ought to go.”
Trump touted the proposal — and himself — during his Indiana remarks.
“This is a once-in-a-generation opportunity, and I guess it’s probably something I could say that I’m very good at,” he told the crowd.
It was the type of speech that Republicans want the President to repeat over and over again in the coming months — one that was, for the most part, focused on the actual agenda item they are pushing forward on. Asked if he was concerned Trump would lose focus or move onto something else, Brady said simply, “I’m not.”
Brady said this of the speech: “Anyone who wondered, will the President get out and sell this? The speech he just gave should reassure you he’s all in.”
It’s all the more important, Brady noted, given the army of lobbyists that is already picking at each individual provision that may end up in the bill.
“Look, they’re gonna fight tooth and nail on this. They will take all of tax reform down to just keep their one special provision,” Brady said. “The American people will have to join with us to make sure that doesn’t happen.”
Democratic opposition heats up
But it’s a framework that Democrats in the House and Senate have already teed off on as skewed heavily toward wealthy individuals and corporations — something Trump has said explicitly he does not support.
“When Donald Trump was talking about this plan over the last few days, he talked about focusing on the middle class, and not helping the wealthy,” Sen. Chuck Schumer, the chamber’s Democratic leader, told reporters. “The plan is a major disappointment, because it so deviates from everything the President said.”
Sen. Ron Wyden, the top Democrat on the Senate finance committee, said the same outside opposition that was central to killing Republican efforts to repeal and replace Obamacare will soon come to bear against the tax plan.
“The public will be equally strong against this plan that is so perverse in helping the wealthy and hurting the middle class,” Wyden said. “And it will fail.”
Asked if he heard the attacks coming — especially related to the decision to drop the top individual rate from 39.6% to 35%, while raising the lowest rate from 10% to 12%, Brady said yes.
“I do. But it’s nonsense,” Brady said. “We lower the tax brackets at every level, so we flatten out the tax code, so those for example who are paying 15% today, will only pay 12%. Those who are paying 10% today, will pay zero. Tax relief, especially for the poor and the middle class is a key part of the reform.”
In a question-and-answer section released on the new framework website, the question is asked: “Will this be a tax cut for the wealthy?” The answer: “No.”
Brady said he agreed with that statement, despite the drop in the top rate, the repeal of the estate tax, the elimination of the alternative minimum tax and the significant reduction of the “pass-through” rate on businesses.
“Our tax code today loaded with a lot of special provisions, many of which are helpful to higher earners and those with very large incomes,” Brady said. “Moving to the simple ‘postcard style’ system means we eliminate a lot of those provisions that they’ve relied upon in the past with the high earners so we can simplify and go lower.”
Brady’s ability to convince the public that’s the case — while also keeping some of those high earners and companies on the sidelines of any lobbying effort — will likely be central to his ability to get anything done. As, of course, will the 52 Republican senators on the other side of the Capitol, whose health care failure has sparked no shortage of outrage inside the House Republican conference. When asked if he had confidence Senate Majority Leader Mitch McConnell could get the job done, Brady made clear his expectations.
“My view is they ran for the Senate promising to deliver on tax reform, they believe it in their hearts, and now that we’ve reached sort of this common framework that we’re moving toward one tax reform approach, I think it makes it more likely the Senate will deliver on it,” he said.