CQ TODAY – TAXES
July 25, 2008 – 6:46 p.m.
Obama Campaign Tests Legislative Waters for Post-Election Economic Plans

With the election still months away, Democratic presidential candidate Barack Obama has started laying some groundwork on economic issues with congressional colleagues who would be responsible for turning his plans into reality.

In preparation for the fall campaign and the legislative work beyond it, Obama economic adviser Jason Furman made the rounds on Capitol Hill recently, meeting with senators as well as Democrats on the House Ways and Means Committee.

Participants in the meetings called them general, broad-brush discussions of economic policy, but the talks gave leading Democrats a chance to start plotting legislative strategy for January, when the party could control the House, the Senate and the White House for the first time in 14 years.

Obama’s Republican rival for the White House, Sen. John McCain of Arizona, is unlikely to enjoy such a partisan alignment of the stars should he win the election, making it more difficult for him to start plotting a Capitol Hill strategy so early.

Obama, a senator from Illinois, will address House Democrats on Tuesday. His campaign did not respond to a request for comment on Friday.

Obama enjoys broad support among Democrats for his stance against extending the Bush tax cuts benefiting upper-income taxpayers (PL 107-16, PL 108-27). He also is proposing a tax cut for senior citizens and a range of new refundable tax credits that would benefit low-income workers and mortgage holders, among others.

Senate Finance Chairman Max Baucus said Obama’s proposals for tax policy are “close” to his own ideas, which Baucus has not spelled out.

“Early. Don’t know yet. Not a lot of details,” said Baucus, D-Mont. “I was more listening to see what they have in mind than I was telling them.”

But on some issues, there are potentially significant differences. House Ways and Means Chairman Charles B. Rangel’s “mother of all bills” (HR 3970) would lower the corporate income tax rate and eliminate corporate tax preferences, while Obama has not been specific on corporate taxes.

Rangel, D-N.Y., and other committee Democrats also want to repeal the alternative minimum tax (AMT), which threatens to affect millions of middle-income taxpayers. Obama’s blueprint isn’t specific on the AMT.

Still, in a broad sense, Rangel said, Democratic tax writers and Obama are “reading from the same page” on trade, taxes and health care.

“We just talked in more general terms, which was very helpful to find out that we’re compatible,” said Rangel, one of the strongest supporters of Obama’s former rival for the Democratic nomination, Sen. Hillary Rodham Clinton, D-N.Y. “Now comes the next stage: to reduce it to something more substantive, and then hopefully we’ll be working toward a final package.”

The specifics, as always, could be tricky. The country’s economic conditions could change, and the Washington special interests that Obama complains about on the campaign trail will want their voices heard.

“Proposing tax reform in a campaign, I dare say, is much easier than trying to implement tax reform,” said Richard E. Neal, D-Mass., chairman of the Ways and Means Tax Subcommittee.

Neal also said he expressed his support for automatic enrollment in individual retirement accounts, a proposal that Obama also backs.

“I wanted to put my hooks into him early,” Neal said.

Artur Davis of Alabama, a Ways and Means Democrat and a close Obama adviser, said an Obama administration would be “committed to having an unusually cohesive relationship with Congress.” Davis said Obama would learn from previous Democratic administrations, which he described as having difficult relationships with Congress, in part because they didn’t have clear priorities or had priorities that didn’t align with congressional leaders.

One key issue could be the timing and order of major legislation, given the pent-up demands of Democrats to move on taxes, health care and global warming.

Rangel said he was “a little surprised” about the Obama campaign’s priorities, though he did not elaborate. Rangel would prefer to tackle taxes first.

“I don’t know what the hell you can think about without first getting out there and seeing where you can get the revenue and the equitable distribution of the burden,” he said.

Rangel stressed one other point: The need to move quickly and decisively after the election.

“We don’t need no damn commissions and studies,” he said.

Source: CQ Today
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