House Speaker Paul Ryan visits Ohio to build support for tax reform

In Nation
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House Speaker is taking his pitch for tax reform on the road in an effort to shore up public support for one of Republicans’ signature issues.

Ryan is scheduled to hold a roundtable with local businesses Wednesday in New Albany, Ohio, near the capital of Columbus. The visit was supposed to provide an opportunity for House Republican leadership to pivot from the messy passage of the health-care bill last week to bread-and-butter economic issues. But following President ‘s bombshell firing of FBI director James Comey on Tuesday, Ryan could struggle to keep his party focused on the growth agenda.

Ryan, widely regarded as a policy wonk, is expected to argue that tax reform can help drive economic growth and deliver on the promise of job creation that was central to Trump’s campaign, according to a person familiar with his prepared remarks.

“I see this a little bit as a return to Paul Ryan’s happy place,” said Rohit Kumar, a principal at PwC’s Washington National Tax Service. “He is the kind of speaker who stays up at night thinking about tax reform. He’s wanted it for years and years and years.”

Still, Republicans have yet to reach consensus on the contours of reform. About eight conservative senators, including Mike Lee of Utah, will head to the White House on Wednesday to meet with Treasury Secretary Steven Mnuchin, according to an aide. Lee has supported a model that dramatically lowers the corporate rate but taxes investment income at the same rates as traditional income.

Even the lawmakers scheduled to join Ryan during his roundtable Wednesday have criticized elements of his plan. Republican Reps. Steve Stivers and Pat Tiberi represent surrounding districts and have expressed concern about the border adjustment tax, a critical component of Ryan’s blueprint for reform.

A person familiar with Ryan’s remarks said he will discuss the importance of leveling the playing field for American companies but did not comment on whether he will specifically mention border adjustment. That proposal would allow U.S. companies to deduct the cost of domestic products and manufacturing, lowering the cost of exports but raising prices for imports.

Ryan is expected to back the broad outline for tax reform laid out by the White House, the person said, which included streamlining the tax code, cutting rates for middle-class households and making U.S. businesses more competitive. However, the administration’s plan lowers the rate for corporations and small businesses to 15 percent — a step further than the 20 percent advocated by Ryan. It also reduces rates for households but eliminates nearly all deductions.

Ryan “supports the principles President Trump laid out on reform and will stress how we cannot afford to miss this moment,” the person familiar with the prepared remarks said.

Ryan and other GOP leaders have been adamant that any changes to the tax code be permanent and that reforms should not add to the deficit — two principles that might fall by the wayside amid pressure from the right for deeper cuts and widespread opposition to efforts to raise revenue. The border adjustment tax, for example, is forecast to raise slightly more than $1 trillion.

The retail industry has been particularly outspoken against the border tax, calling it a “poison pill” standing in the way of tax reform. Domenic Frederico, president of manufacturing company BriskHeat in Columbus, said he would have to reduce his workforce by 20 to 25 percent to make up for the increased costs.

“All in all, we believe the border adjustment would be detrimental to our business,” he told reporters ahead of Ryan’s visit. “It’s a very bad idea.”

Republicans appear to be willing to take time to win more buy-in from businesses, the public and their own party. On one hand, that could help pave the way for quick passage once a bill is introduced and avoid the early missteps of health care. But on the flip side, it will likely push back the delivery date, risking a loss of Republican momentum in the process.

The Trump administration had initially pushed for legislation to be completed by the August recess. Lawmakers had simply banked on getting something done in 2017. Now, some analysts are eyeing early 2018 — or even later.

“No matter what [Ryan] is going to do, he needs to get more support for his plan. … They’re actually quite early in this whole process,” said Jon Lieber, head of the U.S. practice at Eurasia Group. “Now, I’m much more confident that it’s not going to happen this year at all.”

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