Key Senate Democrat resists push to renew Bush tax cuts before election

Likening the US tax code to the "hydra," the many-headed Greek monster, Sen. Max Baucus (D) said Congress should take on the herculean task of tax reform by building consensus and trust behind the scenes in the run-up to November's election.

"We should try to avoid divisive votes prior to the election," said Senator Baucus of Montana, chairman of the Senate Finance Committee. "I don't want members of the House and Senate too locked in" to their positions by preelection votes before the lame-duck session and beyond.

That stance appears to put him at odds with his House counterpart, Ways and Means Committee Chairman Dave Camp (R) of Michigan. Representative Camp and the House Republican leadership say they will vote to extend for another year all of the Bush tax cuts, which are slated to expire in December. Such an extension would reduce economic uncertainty and prevent tax rates from rising for all Americans come Jan. 3, 2013, they argue.

"We don’t have to wait until the end of the year," Camp said in an interview Friday. "We could extend current tax law now, and frankly the sooner we send that signal, the better."

But Baucus, in a speech on tax reform at the Bipartisan Policy Center on Monday and in a subsequent discussion with reporters, said "the better approach at this point" is his strategy of engaging members of Congress in discussions, to educate them about the main tax-reform proposals, such as those advocated by President Obama's debt commission, commonly known as Simpson-Bowles after the two chairmen, and by former White House Budget Director Alice Rivlin and former New Mexico Sen. Pete Dominici.

After lawmakers establish a shared base of knowledge, Baucus said, he hoped that negotiations over "tax extenders" – temporary tax provisions that members of both parties see as ripe for elimination – could serve as a trust-building exercise. After that would come changes for larger issues, such as to America's income-tax structure.

Baucus offered only broad outlines of his goals for tax reform, saying such an effort should set out to foster job growth, increase American competitiveness globally, spur innovation, and offer economic opportunity to all Americans.

He repeated the Democrats' position that the tax code "simply [doesn't] raise enough revenue" and argued for instituting tax provisions that prevent companies from shifting profits to low-tax havens abroad.

Taxes are just one part of Washington's year-end "fiscal cliff." Before 2013, Congress and Mr. Obama must contend not only with expiration of the Bush tax cuts, the potential imposition of the Alternative Minimum Tax on thousands of upper-middle-class households, and the need to extend key tax credits, but also with spending cuts stemming from last summer's debt ceiling deal and the need to handle unemployment benefits.

That's a lot to do in the six weeks between the election and the inauguration of a new Congress, and few in Washington believe reshaping America's tax code can be added to the agenda during that time. Hence Baucus's main point: Everybody needs to be on the same page for the heavy lifting ahead.

"Nothing consequential ever happens by working alone," Baucus said.