House of Representatives

On Washington: Paul Ryan Puts It All on the Line in Tax Fight

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Mr. Ryan, long the leading architect of politically charged fiscal policy for House Republicans, says it is the potential economic benefit of reducing corporate taxes and doubling the standard deduction for individual taxpayers that is driving them.

But he acknowledges that Republicans must produce a victory for antsy constituents after Republicans failed to repeal the Affordable Care Act.

“We won the election, and now we have an obligation to make good on our word and make good on our principles and make good on the things we said we would do to help people,” he said, “and this is time to deliver.”

As he spoke of the tax proposal, Mr. Ryan, the former head of both the tax-writing and budget committees, seemed energized by the challenge. But a speaker can’t will a proposal into law. It takes votes. And some Republicans quickly peeled away, joining in opposition expressed by influential and often Republican-aligned trade groups such as the National Association of Home Builders and the National Association of Realtors.

Those groups expressed alarm that proposals to cap the mortgage interest deduction at $500,000 and end the ability to deduct state and local income taxes could rattle the housing industry and drive up expenses for those in higher-tax states. Other interest groups are expected to dig in against a plan that eliminates a wide variety of popular deductions from medical and moving expenses to the cost of having taxes done by a professional.

Mr. Ryan said that the interest groups were just protecting their privileged rank in the tax hierarchy and that lawmakers would have to look beyond such narrow considerations.

“Tax reform is really hard because we’re taking on myriad special interest provisions and groups,” said Mr. Ryan, noting that such clashes are a primary reason efforts to reconfigure the tax code have failed since 1986. “The special interests that protect the current code of the status quo have successfully managed to overwhelm the general welfare of the country.”

Mr. Ryan will very likely have to steer his tax plan to approval with no help from Democrats, who view the Republican proposal as far too weighted toward big business and the wealthy while doing far too little for the middle class to justify adding as much as $1.5 trillion in red ink. It is yet another example of the partisan divide that has contributed to years of Washington dysfunction.

Mr. Ryan believes passage of a tax plan that produces the promised economic benefits could have a much broader impact and help ease the nation’s political divisiveness.

“I think one of the reasons we’re a polarized, high-anxiety country is because we’ve had pretty flat economic growth and pretty flat opportunity,” he said. “Most people haven’t got a pay increase. Most people, half the people in this country, live paycheck to paycheck, so there’s a lot of economic anxiety. And I think just one of the key solutions is faster economic growth, more jobs. And I think the best thing we could do to deliver that is tax reform.”

In achieving success, Mr. Ryan will need to work hand-in-hand with President Trump, who yearns for a tax cut victory as much as Mr. Ryan does. The speaker has had a complicated relationship with the president, a man he barely knew before the campaign, beginning with Mr. Ryan’s decision at the conclusion of the primary season to temporarily withhold his support from the presumptive nominee.

Now his decision to regularly back the president and not chastise him for various perceived unpresidential acts has drawn Mr. Ryan scorn from those who think he should follow the example of his friend and former Republican House colleague, Senator Jeff Flake of Arizona, and condemn the president’s conduct. Mr. Ryan disagrees.

“I don’t see why we would want to start a circular firing squad in our party when we have an opportunity that’s almost a once-in-a lifetime opportunity to make a big change for people’s lives,” he said, breaking with Mr. Flake. “That’s not what people voted us in to do, is scream and yell and call each other out and, you know, get into these shouting matches. They elected us to fix their problems, not grouse about, you know, personality differences.”

Mr. Ryan is heading into a 2018 midterm election in which Republicans are predicted to lose seats and see their majority shrink, if not disappear. The outcome of the tax fight is certain to influence events.

The new proposal will undergo changes as it makes its way through Congress. If those revisions aren’t enough to secure passage and win public appreciation, it may be House Republicans and their leader who are in store for big changes of their own.

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Wendy Pettit

Wendy Pettit is a writer for NYT and writes for other publications on her spare time. She lives in Chicago with her husband and her dog Zuko.

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