On Wednesday, March 18th the Republican leaders of Congress’s two main tax committees, the House Ways and Means Committee Chairman Paul Ryan, R-Wis., (hereinafter “Ryan”) and the Senate Finance Committee Chairman Orin Hatch, R-Utah, (hereinafter “Hatch”) wrote a letter to the Treasury Secretary Jacob Lew (hereinafter “Lew”) urging him to avoid pursuing an executive action by President Barack Obama (hereinafter “Obama”) on major tax reform in 2015.
The letter comes in direct response to a statement by the White House Press Secretary Josh Earnest (hereinafter “Earnest”) earlier this month suggesting that Obama might be open to using his executive authority to overhaul the tax code and close select tax loopholes for large corporations. The White House spokesman was probed by a reporter about a proposal from Senator Bernie Sanders, I-Vt., (hereinafter “Sanders”) that the White House could raise as much as $100 billion through using executive action to close corporate loopholes. Earnest responded, “Well, for any sort of possible executive actions along those lines, I’d refer you to the Treasury Department. But the President certainly has not indicated any reticence about using his executive authority to try to advance an agenda that benefits middle-class Americans. Now, I don’t want to leave you with the impression that there is some imminent announcement.” Earnest was then further pressed by the reporter on whether an executive action was under consideration, and he replied, “Well, the President has asked his team to examine the array of executive authorities that are available to him to try to make progress on his goal. So I’m not in a position to talk about any of those in any detail at this point, but the President is very interested in this avenue generally.”
In today’s letter, Hatch and Ryan expressed their apprehensions to Lew that Obama might try to circumvent Congress through executive action. In its place they urged the administration to challenge any unfavorable provisions within the tax code by collaborating with Congress on comprehensive tax reform instead of taking unilateral action. “It would be a significant setback if you decided to interpret or implement tax laws based on your political preference rather than the consensus that the tax reform process could produce,” they wrote in today’s letter. Finally, they pointed out “we urge you to work with the Congress on tax reform, rather than against it.”
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