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Nov. 5 – Sen. Orrin Hatch (R-Utah) is set to become the Senate Finance Committee's next chairman, following the Republican takeover of the upper chamber.
He is expected to further champion issues he has pushed the last three years as the panel's ranking member, not the least of which is remaking the U.S. tax code. Hatch has backed revenue neutrality and a move toward a system that taxes companies based on where their income is earned, positions generally at odds with Democrats who have controlled the committee since 2007 and supported a raft of different revisions.
Hatch will have encouragement from big business interests that want a lower corporate tax rate, and there is speculation that agreement with House Ways and Means Committee Republicans on overhauling tax laws could come early in the 114th Congress, particularly in the first half of the year, before attention shifts away from legislating to the 2016 presidential election.
But a deal in that short time frame would necessitate buy-in from President Barack Obama and skeptics have questioned that possibility since the White House has signaled support for rewriting corporate tax laws but not taxes that individuals pay.
“Republicans have long called for an overhaul of the federal tax code, and the fact they will control the House and Senate next year arguably gives them a stronger hand in shaping the pace and direction of tax reform,” said Jon Traub, managing principal at Deloitte Tax LLP and a former Ways and Means staff director. “Nonetheless, tax reform can't become law without the signature of the president, and there remain substantive differences between the parties that will make it a challenge to find common ground between a Republican Congress and a Democratic president.”
Similarly, Hatch would also seem unlikely to find agreement with Obama on repealing the Affordable Care Act's excise tax on medical devices, for which Hatch has introduced a bill (S. 232).
With Hatch at the helm beginning in January, he has said the committee could also take up legislation to renew the Internet Tax Freedom Act, address other unspecified multistate tax issues and finance the Highway Trust Fund over the long term.
The panel will undertake such endeavors with a new ratio of members from the two parties, essentially flipping the current composition of 13 Democrats and 11 Republicans. The roster's exact proportion won't be determined until later this month, after the dust settles from a couple of races still too close to call, and after leadership elections are done.
Possible Republican additions to the committee include Sens. Dan Coats (R-Ind.) and Dean Heller (R-Nev.). Coats previously co-sponsored legislation to revamp the tax code with the committee's outgoing chairman, Sen. Ron Wyden (D-Ore.), and Heller was a Ways and Means member when he served in the House.
Rumors also have linked Heller to leading the National Republican Senatorial Committee for the 2016 election cycle, and incoming Senate Majority Leader Mitch McConnell (R-Ky.) could reward him for that job with the Finance Committee assignment since Republicans could have difficulty retaining their newfound majority given expected vulnerability in two years.
Another Republican rumored for the Finance committee is Sen. Kelly Ayotte (R-N.H.), though her current spot on another top-tier panel, the Senate Armed Services Committee, could complicate that. Up for re-election in the 2016 cycle, a Finance panel perch would provide a plum position to pad her campaign war chest, and if selected she would be the committee's first female Republican member since former Sen. Olympia Snowe (R-Maine) retired in 2012.
Among certain changes, Wyden will serve as ranking member when the new Congress convenes.
One subtraction from the Democratic side of the aisle will come from the retirement of Sen. John D. Rockefeller IV (D-W.Va.). If another is required to exit, the least senior Democrat is Sen. Mark Warner (D-Va.), who has a slim lead in results for his re-election as of Nov. 5, but whose race has not been called yet.
No committee Republicans up for re-election lost Nov. 4.
Other junior Democratic members on the committee include Sens. Bob Casey (D-Pa.) and Michael Bennet (D-Colo.), albeit with a bit more seniority than Warner. He just received his appointment to the panel earlier this year when a slot opened after the exit of the former chairman, Sen. Max Baucus (D-Mont.).
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