What's the Impact of Baucus' Retirement on Tax Reform?

By Ken Berry

On April 23, Senator Max Baucus, long-standing chairman of the Senate Finance Committee, announced that he won't be seeking reelection in 2014. Instead, the Democratic senator from Montana intends to focus on helping to shape tax policy in our nation's capital until calling it quits for good. But will Baucus' announced retirement fuel or douse tax reform fever? It remains to be seen.
 
Baucus doesn't expect to take a passive role during his lame-duck status. "I'm not turning out to pasture because there is important work left to do, and I intend to spend the year and a half getting it done," he said in a prepared statement. "Our country and our state face enormous challenges  rising debt, a dysfunctional tax code, threats to our outdoor heritage, and the need for more good-paying jobs. I'm ready to roll up my sleeves and get to work."
 
The accolades for Baucus poured in from both sides of the aisle soon after the announcement. Former Senate Finance Committee chairman Chuck Grassley (R-IA) noted, "We ran the Finance Committee for ten years together, and every bill except for three or four was bipartisan. The Senate will be worse off as a deliberative body when Senator Baucus leaves." House Ways and Means Committee Chairman Dave Camp (R-MI), with whom Baucus has been meeting with on a weekly basis, said, "Max is a true legislator and friend for whom I have great respect, and I look forward to continuing our work to fix the tax code and protect and preserve our entitlement programs for current and future beneficiaries." 
Tax reform certainly remains at the top of his agenda as Baucus prepares to leave the Senate. But it's unclear if his pending departure will help or hurt the prospects for meaningful changes in the complex and unwieldy tax code. Consider the following four points:
 
1. Baucus can now follow his conscience. He doesn't have to kowtow to Democrats who advocate higher taxes for the wealthy and fewer tax loopholes for corporations. This makes it more likely that Baucus will be able to work toward compromise with Camp, his Republican counterpart in the House.
 
2. Baucus would like orchestrate a triumphant climax to his career. He might see a significant overhaul of the tax code as his lasting legacy. With the end game in sight, Baucus will "go the extra yard" to try to make tax reform a reality. 
 
3. Baucus can only do so much. Among Beltway insiders, Baucus wasn't viewed as an impediment to tax reform in a sharply divided Congress. He wasn't part of the problem, but he might be part of the solution. If he hasn't been able to move mountains before, there's no concrete evidence to suggest he'll be able to do it now.
 
4. Baucus will find his power receding. Although it may be liberating to free of partisan shackles, it comes at a price. Baucus' clout within his tax-writing committee, which was already somewhat suspect, will probably begin to wane. And his staff members, who are already starting their own job searches, may not be as committed to the task.  
 
It's expected that Senator Ron Wyden (D-OR) will be named as the next Senate Finance Committee Chairman. Will he be picking up the tax reform torch from Baucus or extinguishing it? The next few months should be revealing. 
 
Related articles:
 

You may like these other stories...

Boehner addresses GOP priorities ahead of midterm electionsHouse Speaker John Boehner (R-OH) on Thursday delivered what amounted to closing arguments ahead of the November elections, laying out a list of Republican...
As anyone who's ever been through a divorce can attest, the pain of parting with your spouse isn't just emotional—the fallout from divorce can wreak financial havoc as well long after the dust in the courtroom...
Former DOJ Tax Division head Kathryn Keneally joining DLA Piper in New YorkGlobal law firm DLA Piper announced on Thursday that Kathryn Keneally, the former head of the US Justice Department Tax Division, is joining the firm...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.