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National Review’s Robert Costa On What House Republican Strategy On Tax Reform Might Be, And Why It’s Troubling

Wednesday, April 24, 2013

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HH: Joined now by Robert Costa of National Review Online. He is one of, of course, America’s great young political reporters. Robert, before we turn to politics, as a Notre Dame alum, you must be wondering where Manti Te’o is going to go tomorrow. I hope he ends up in a Cleveland Browns uniform, because I think he’s going to be a magnificent linebacker. But what do you think?
RC: It was such a great season for Notre Dame, 12-0, really got me back into the spirit of Irish football. But you know, his troubles at the end of the year, I think, are going to hurt him. A lot of coaches and owners are going to have some reservations. But he’s a great athlete, really was the backbone of Notre Dame defense. I think he goes high second round, low first round.
HH: Okay, I think low first round. I’m hoping the Browns trade down. We’ll see. Now let’s get to politics and talk about team GOP in the House, which did not have a 12-0 season. At best, they’re playing .500, and they got smoked early in the season against President Obama. I opened my iPad today to Politico, Robert Costa, and see that Dave Camp is running over the House with a secret poll showing that 80% of Americans favor a tax code that’s fair, which is like 80% of Americans favor Superman. But he’s not going to arrive any time soon. What is going on?
RC: Look, tax reform is now becoming the issue on Capitol Hill. Republicans are getting uncomfortable about immigration, so now this HR 1, that’s always been there since Congress started in the 113th, they’re going to use it. But you’re right. A lot of reservations right now about what Dave Camp’s going to do. I sat down with Peter Roskam and Kevin McCarthy, the two top whips in the House Republican conference, and they said they’re just not really being specific right now about what they’re going to do in terms of the code, other than they’re going to try to flatten it, of course. But they’re not going to be specific about exemption. And so I think you’re really one of the lone voices out there in the media right now going after Camp, wondering about his process, wondering what kind of deals he’s going to cut on tax reform. But I think your lone voice is soon to become a chorus.
HH: Well, Peter Roskam is a very good guy, and I’m always glad to have him on, but we mixed it up last week because regular order is not what we see, but it was what we were promised. But more importantly, Robert Costa, Kevin McCarthy’s a very smart guy, and he knows we’re not going to get anything through Harry Reid that is anything like what a Republican tax reform proposal would look like, whether center or center-right or right wing, and even if we did, the President would veto it in order to make the Republicans look bad. This is like the charge, I called it this morning, of the Republican light-headed brigade. This is a nightmare.
RC: Yeah, but Hugh, I was over at the Capitol Hill Club yesterday, and that’s a Republican hang-out on Capitol Hill as you know, and I was talking to some members. I said just look, on background, off the record, what’s the real story with tax reform? And they said look, Costa, we know Obama, Reid, they’re going to try to roll us. Hewitt and others are right, but we’re in divided government. Are we going to try to do anything with the code, getting any concessions to improve this situation or not? And so they’re willing to play ball. But you’re right. A lot of conservatives just say don’t even enter into this circus, you’re only going to get burned.

HH: His partner in this, and the reason I call it the unicorn hunt, is Max Baucus. And Max Baucus was the engineer behind a lot of the fiasco, what he himself calls the train wreck of Obamacare. So Robert, this is a hard question for a political reporter who needs sources to answer, so I’ll leave it to your diplomatic skills, which are ample to do so. But this isn’t the sharpest set of knives in the drawer to be redoing the tax code.

RC: You’re right. And the retirement of Max Baucus, it’s funny to me when I talk to Republicans on Capitol Hill, because they say the liberal media keeps saying that Max Baucus’ retirement is going to lead to a better tax reform package, because now he’s not encumbered by reelection and having to do politics. He can do what’s right for the country and do tax reform. But Max Baucus is a very clumsy legislator. He’s been in Congress, in the Senate, since Carter was president, but he doesn’t have much of a record, except being the guy who helped craft Obamacare. So when it comes to tax reform, this is a guy who’s, almost his entire former staff is on K Street as tax lobbyists, and so you’re saying Max Baucus is going to be the one to fix it? I’m doubtful.

HH: Okay, and that’s what I really think is going on here, is that a group of Ways And Means staffers who are going to leave when their chairman retires, and is obliged by term limits to give up, are trying to make a lot of connections and a lot of friends on the K Street corridor that does tax lobbying. So they’re killing off that which could be done, the medical device tax repeal, and a few changes here and there on depreciation allowances, etc., to help the economy out and save jobs right now in order to feather their nests. I think, actually, there’s going to be quite a lot of reaction against this. Why would Peter Roskam want anything to do with this?

RC: Because, here’s the paradox for House Republicans. On paper, when it comes to messaging, they want to be for tax reform. They want to simplify the code. They want to broaden the base. But here in Washington, there’s a lot of tension, because K Street has too much influence over this entire process, so you have Republicans moving forward, inching ahead on tax reform, but at the same time, K Street, I think, is probably wooing too many of the members. Republicans aren’t getting specific enough, they’re not probably being courageous enough, bold enough. They’re waiting to see what Democrats do, and that leads to a muddy process. So if you’re a Republican and you expect this to be a clean tax reform negotiation, it’s just not going to be happening like that. And I think that’s why you’re going to see continued rollout of Republicans who just have reservations because of the process. And I think your point real quick, Hugh, about regular order? So important. If this thing does not go through committees, the full committees, subcommittee hearings, there’s going to be an outcry.

HH: Well, the idea that he’s shopping it, and that’s the Politico story, with Kevin McCarthy to freshmen, is a renunciation of regular order, because what that gets the freshmen to do is to commit to something before their constituents have seen it. And I’m telling you, Robert, when they take away the charitable deduction, or limit it in any way, and when they go after the home mortgage deduction, it’s going to be an explosion of wrath. Americans are sick of losing everything and paying more.

RC: That’s exactly right. And the Republicans still aren’t clear about which loopholes they’re going to close, and how they’re going to go after certain deductions. I mean, this is the story of the Romney campaign, never being specific. And I’m telling you, I sat across from Roskam and McCarthy, good gentlemen, good conservatives, smart guys, but they were not ready at this point, from a political perspective, to get into specifics. And I think you’re right. Once tax reform becomes more than just a discussion of competitiveness, of some broad idea, and it gets down into the nitty-gritty, this issue becomes very complicated, and you’re having to deal with the tough decisions that everyone should be involved with.

HH: Do they understand the political peril? I posted a picture of one of the famous painting of the Charge Of The Light Brigade today, because they look great as they went into battle, and they got slaughtered. And that’s what’s going to happen to the House GOP. I think they’re endangering the majority. And I wonder where is Eric Cantor, who’s got the best political antenna in the business?

RC: That’s exactly right, Hugh, because I think they’re looking at this as something that sounds good. They don’t have to talk about Obamacare every second, they don’t have to talk about immigration. This gives them something they can talk about – growth. And it gets it back to the economy. But I think your concern is a very valid one, because beyond just the politics of this and how it sounds, we’re going to do tax reform, we’re committed to tax reform, you have to go after deductions, and you have to go after Democrats, you have to go after loopholes that have been really almost calcified into the tax code. And that’s difficult. And I’m just not so sure that unless you have a bold vision from the beginning, and public input, how Republicans really get their vision through here.

HH: It cannot be done, and Robert Costa of Nationalreview.com, I’ll continue to read your stuff to find out when it dawns on Republicans it can’t be.

End of interview.

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