Baucus or Hatch: Who Has it Right?

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Chairman Max Baucus, D-Mont., left, has a word with ranking member Sen. Orrin Hatch, R-Utah, before a Senate Finance Committee hearing in Dirksen entitled ‘The President’s 2012 Trade Agenda,’ featuring testimony by Ron Kirk, U.S. Trade Representative.

Sen. Max Baucus either has or hasn’t made a private promise to Sen. Orrin Hatch that he won’t seek additional revenue for deficit reduction through a tax code rewrite, depending on whether you believe Baucus or Hatch.

“We both have agreed to revenue neutrality,” said Hatch, the top Republican on the Finance Committee that Baucus chairs, according to Tax Notes. Hatch, speaking to several reporters today, said the “battle is over” on revenue and that he expected Baucus to “live up to that.”

That’s the exact opposite of what Baucus told Senate Democrats yesterday and what he’s said in public before.

“There is no agreement,” said Sean Neary, a spokesman for Baucus. “Senator Baucus believes there should be revenue. This issue will continue to be debated as part of the bipartisan process that Senator Baucus is working on with Senator Hatch.”

A bill without revenue increases could face difficulty getting through the Senate, where Democrats have a 54-46 majority. Republicans, meanwhile, are wary of engaging too deeply in the details of tax revisions if there’s a possibility they could turn into a tax increase.

Democrats’ insistence on tax increases is a “stumbling block to even getting started,” Senate Republican Leader Mitch McConnell of Kentucky said yesterday.

Baucus, a Montana Democrat, and House Ways and Means Chairman Dave Camp, a Republican, have deferred their discussions on revenue and said they recognize they’ll have to resolve that later.

Baucus and Hatch have asked senators to write to them by July 26 with suggestions on what tax breaks should remain if they start with a clean-slate approach that wipes out credits and deductions.

The staffs for Baucus and Hatch have now issued a joint statement that pledged bipartisan commitment and saying that the question of whether revenue will be devoted to deficit reduction “still needs to be answered and will be resolved through this process” that the senators have begun.

“The issue of raising revenue through tax reform is clearly a subject of great debate amongst both parties,” the statement said. ” Chairman Baucus and Ranking Member Hatch are trying to move the ball forward in a reasonable and responsible manner as they work to reform the code. They will tackle many questions as part of this process.”

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