Policy

New Ways and Means Ranking Democrat Looks for Bipartisanship in Tax Overhaul

Richard Neal says he’s bringing a new approach to tax-writing panel

Massachusetts Rep. Richard Neal emphasizes “pro-growth and aspiration” as important themes for Democrats. (Tom Williams/CQ Roll Call file photo)

Rep. Richard E. Neal of Massachusetts aims to counter conservative priorities of President Donald Trump, while seeking a few shared trophies as the new top Democrat on the Ways and Means Committee.

An institutionalist who’s finally ascended to his party’s ranking seat on a committee after 28 years in the House, Neal turned 68 earlier this month and is in his 15th term representing Springfield and far western Massachusetts. He’s considered a Democrat whom business can work with and who wants to make a case to working-class voters who abandoned the party last November.

He said he’s going to bring a different approach to Ways and Means than his predecessor, the progressive Sander M. Levin of Michigan.

“I was the change,” said Neal, who emphasizes “pro-growth and aspiration” as important themes for the Democrats.

Neal showed some signs of disgruntlement with the Democratic power structure in the House late last year when he signed a letter calling for a delay in party leadership elections. But it didn’t cost him when, just before House Minority Leader Nancy Pelosi’s face-off against upstart Tim Ryan of Ohio, Levin, a Pelosi ally, withdrew as Ways and Means’ ranking member. 

Neal’s friend, Georgia Democratic Rep. John Lewis, had the seniority edge but didn’t want the job. Neal was next in line and got the nod as expected. 

Democrats adhered to seniority rules in 2010, too, when Neal narrowly lost out to Levin in a race to be the panel’s chairman after New York Democrat Charles B. Rangel stepped aside.

This time around, Neal had an ally in Ryan, who said Neal’s “working-class message” will be an important addition at the leadership table and help Democrats win back heartland voters: “Springfield looks a lot like Youngstown. The guy understands.”

While Neal vows to oppose GOP efforts to uproot the 2010 health care law and enact a partisan tax rewrite, he said he wants to exchange ideas and cut deals on more modest measures.

“I hope that we can stay in the game as long as possible on tax reform,” Neal said.

He has called for a package of middle-class tax cuts as a Democratic alternative to a GOP tax overhaul. “Rather than cutting taxes for people at the top, that tax cut ought to be expanded considerably for people in the middle,” Neal said.

He aims to develop a plan that is revenue-neutral based on traditional, or static, scoring, similar to a 2014 blueprint by then-Ways and Means Chairman Dave Camp. The Michigan Republican consulted Democrats on his plan, but House GOP leaders sank it. Now, they seek more ambitious tax cuts that would be revenue-neutral based on macroeconomic, or dynamic, scoring that factors in economic growth spurred by cuts.

“The jumping-off point for me, probably, is that it goes well beyond anything that Camp proposed,” Neal said of the House GOP tax plan.

In addition to middle-class tax cuts, he has also signaled support for a number of incentives for business and for economic development such as enterprise zones, tax-exempt municipal bonds and the historic preservation tax credit.

Neal confirmed he would hold a series of regular one-on-one meetings with the Texas Republican who chairs Ways and Means, Kevin Brady, to discuss issues and shared interests.

Brady said the two were “going to look for common ground.”

“He understands the innovation industry, and he knows America is no longer competitive around the world in the tax area,” Brady said. 

Unlike Levin, Neal has sometimes bucked his party’s liberal wing, as when he backed a plan to replace the Labor Department’s fiduciary standard on investment advice to ease mandates on businesses like his hometown constituent, Massachusetts Mutual Life Insurance Company. Trump has now moved to reverse the rule.

In 2015, Neal broke ranks when party leaders opposed permanent tax breaks without offsets in the 2016 omnibus spending law. Neal said he voted “aye” because he’d helped write sections of the bill. He worked on a number of items including a streamlining of partnership audit requirements.

Neal’s independent streak and negotiating skills resonate with political donors. He ended the 2016 cycle with $3 million in campaign cash and $860,000 in reserve for his political action committee, with ample backing from the insurance, securities and pharmaceutical industries, according to the Center for Responsive Politics.

Neal predicts the GOP’s “unitary government” will face intraparty disputes that will make it easier for Democrats to fight proposals to repeal expanded Medicaid benefits and the individual health care coverage mandate.

“One of the realities of politics remains that you can carp about who is receiving the benefit for whatever reason. What’s hard to do is to take the benefit away,” he said.

In addition to such battles, Neal has his eye on less controversial measures such as upgrades to health care exchanges, which he compares to bipartisan tweaks Congress has made to President George W. Bush’s Medicare drug benefit.

While opposing the Trans-Pacific Partnership trade deal, Neal envisions a pivot to Europe and to the Transatlantic Trade and Investment Partnership talks and other deals.

“You are likely to move in the direction of more bilaterals, as was the case with Peru or Panama, where you can enforce trade agreements,” he said.

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