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Trump Return Request May Make Tensions Fray for House Tax Writers (1)

April 5, 2019, 3:49 PMUpdated: April 5, 2019, 5:42 PM

Rep. Richard Neal (D-Mass.), who heads the powerful House Ways and Means Committee, likes to talk about bipartisanship. Yet, his request for six years of President Donald Trump’s tax returns is going to put that spirit of comity to the test.

The relationship between committee members from both parties has alternated between tension and congeniality in the months since the Democrats took control of the House. There has been regular sparring over provisions in the 2017 tax law. But, there were also a series of unanimous votes on high-priority bills to strengthen retirement savings and rework the Internal Revenue Service.

Those challenges are going to be amplified now, if the immediate responses to the request are any indicator. Ranking member Kevin Brady (R-Texas) accused Democrats of weaponizing the tax code. Sen. Chuck Grassley (R-Iowa), Neal’s Senate counterpart, berated Democrats on the Senate floor April 4.

The administration has until April 10 to decide whether to comply with Neal’s request. And chances are they won’t, ensuring that the battle over the tax returns moves to the courts, possibly going all the way to the Supreme Court. That provides an opportunity for Democrats to use the issue in the 2020 elections, but left in the balance is likely any chance of work with the Republican Senate, a former Republican aide said.

Rep. Darin LaHood (R-Ill.) said Neal’s request was all about politics and Democrats trying to placate their liberal base.

“The Democrats couldn’t get what they wanted in the Mueller report. So they have defaulted to asking for the President’s taxes. It sets a terrible precedent,” LaHood, a committee member, said April 4. “It causes politics to come into the Ways and Means Committee.”

Staying on Track

Neal pointed to the recent bipartisan vote and a markup likely during the week of April 8 on bipartisan health bills when asked how his request changes dynamics on the committee.

The tax-writing panel has historically prized bipartisanship. Some members remain hopeful: Rep. Vern Buchanan (R-Fla.) said that bipartisan work should continue, and Rep. Earl Blumenauer (D-Ore.) said the Trump request was an independent action that shouldn’t interfere with the committee’s work.

Neal and other members have an ambitious agenda for this Congress, ranging from deciding how to pay for an infrastructure bill to expanding tax benefits for the middle class. But all that will need help from the Republican Senate and the Trump administration.

Degree of Partisanship

The request amps up pressure and is a clear sign that congressional Democrats are focusing on oversight of the administration.

“Beginning with what happened with the passage of the tax bill. It was done under partisan circumstances. This is only going to ratchet up the tensions,” said Charles Boustany, a former Republican Ways and Means member. Boustany is now a partner with Capitol Counsel LLC.

Added to this fraught atmosphere is ongoing speculation about Special Counsel Robert Mueller’s Trump-Russia probe, as well as efforts by other House committees that want more oversight of the administration.

Still, Boustany, a former chair of the panel’s tax policy subcommittee, held out hope for better sense to prevail. He said that historically committee members have been very good about separating politics from policy.

Rep. Dan Kildee (D-Mich.) said voters expect some disagreements between lawmakers in the two parties.

“But that doesn’t get in the way of those areas where we actually have some common ground,” he said. Kildee said Trump changed the norms by not releasing his tax returns when he ran for president.

Going forward, the best outcome for Neal is a denial by the administration, the former Republican aide said. That would keep the issue alive for Democrats through the presidential election campaign and they can make the argument that the President is flaunting the law.

Grassley’s Response

There are people who will be watching what Grassley does with interest because he is an effective counterweight to Neal.

“He’s his own person. He might decide to do something,” Boustany said.

Grassley was critical of Neal’s request during his April 4 floor speech, which he characterized as evidence that Democrats are trying to go after Trump any way they can.

“They dislike him with a passion, and they want his tax returns to destroy him,” Grassley said. “That’s all this is about, and it’s Nixonian to the core.”

Harsh words aside, Grassley told reporters that he doesn’t expect the tax returns issue to affect his committee’s work.

Another former Senate Republican aide who spoke on the condition of anonymity said with Grassley having less than two years left as the Senate panel’s chairman and with the election in 2020, he might be more inclined to try and pass legislation this year rather than getting into a hyper-partisan fight.

To contact the reporters on this story: Kaustuv Basu in Washington at kbasu@bloombergtax.com; Allyson Versprille in Washington at aversprille@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com