Tax Reform a Long Shot in Senate

Senators not interested in helping Finance Committee with 'blank slate approach.'

(Charles Dharapak/AP)
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The epic quest to overhaul the country's tax code drudges on, but not everyone is cooperating on Capitol Hill.

The chief architects of the tax reform effort, Finance Committee Chairman Sen. Max Baucus, D-Mont., and ranking member Sen. Orrin Hatch, R-Utah, have given their fellow senators some homework: check out the more than 54,000 pages (18 pounds in all) of tax policy and send them a letter by July 26, outlining their favorite tax breaks and priorities.

It's part of the team's "blank slate" approach, an effort to assume nothing in the tax code is sacred. It's the senators' effort to clear out the thousands of tax breaks available to homeowners, parents, corporations, charitable donors, oil companies and just about anyone who has ever lobbied on Capitol Hill.

"This blank-slate is not, of course, the end of the discussion," Baucus and Hatch wrote in a letter to colleagues. "Indeed, we both believe that some existing tax expenditures should be preserved in some form. But the tax code is also littered with preferences for special interests."

Former Sen. Alan Simpson,R-Wyo., says it is a pretty solid approach to a complex problem that hasn't been addressed comprehensively in 30 years.

[READ: Does Bye-Bye Baucus Mean Bye-Bye Tax Reform?]

"They are trying to do an honest thing. Tough is hardly a word for what they are trying to do," Simpson says. "It would be like giving birth to a live porcupine."

And some members aren't making it any easier, grumbling that the task is an absurd request and a waste of time.

"I think tax reform is a job better done by the Finance Committee and I don't intend to try to write the tax bill," says Sen. Roy Blunt, R-Mo. "It is a job that should be done through regular order and regular order is not asking every senator to write the tax code."

Sen. Jay Rockefeller, D-W.Va., worries a "blank-slate approach" could put the poor in jeopardy as corporations rush to lobby for their interests, but families who rely on things like the child tax credit and mortgage interest deductions are left without an advocate on Capitol Hill.

"I think anytime you remove everything that is in there from the slate, it is harder to get it back on," Rockefeller says. "I got to protect my basics like children's health insurance programs and the child tax credit. You will find most of my things are around protecting people who are in trouble."

[OPINION: How to Reform the Tax Code]

But despite the fact that they've gotten few proposals submitted so far, Baucus and Hatch continue to claim momentum is building.

"People are busy, but it is to their advantage to participate," Baucus says. "The world tends to be run by deadlines, and people tend to wait until the last minute."

Baucus unequivocally dismissed the excuse he's hearing from some colleagues that submitting a piece of paper with tax priorities could put them in an uncomfortable situation down the road if the information was ever leaked.

"We are protecting total confidentiality," Baucus says.

Time is of the essence though. With Baucus retiring in 2014 and House Ways and Means Chairman Dave Camp, R-Mich., leaving his post in 2015, hours of work and dozens of hearings with experts to address the tax code could be for naught if lawmakers don't release a plan soon.

"I don't know whether to be optimistic or not," Rockefeller says about the time frame.

[ALSO: Rethinking Tax Breaks for Homeowners]

Others boasted tax reform would only happen when the country was approaching its budget showdowns this fall.

"I think tax reform can only happen in the context of a budget agreement," says Sen. Ben Cardin, D-Md.

Leaders are not much more optimistic about the prospects for reform.

Republicans want revenue neutral tax reform and Democrats are set on raising revenue through the tax code.

"The dilemma we have here is that the president and a significant number of Senate Finance Committee Democrats have indicated this is mostly about raising revenue," says Minority Leader Sen. Mitch McConnell, R-Ky. "So, you know, I don't see how we get anywhere, candidly, even though we all know it needs to be done to make our country more competitive."