WASHINGTON (Reuters) - The top Republican in the U.S. House of Representatives is expected to reassure business leaders on Tuesday that tax reform is on track for this year, despite repeated delays and a string of political distractions from President Donald Trump.
In what is billed as a major speech, House Speaker Paul Ryan will seek to dispel the notion that tax reform is adrift by describing what a U.S. tax code overhaul will look like, according to a source close to Ryan’s office.
The speaker will emphasize the importance of permanent reforms and reject the notion that legislation should do little more than reduce tax rates, the source said. He will underscore the need for international corporate tax reforms in remarks to the National Association of Manufacturers.
Aides said he is not expected to delve into the details of tax proposals.
The Wisconsin Republican delivered a similar optimistic message to lobbyists and campaign donors in Virginia over the weekend, adding that he expected Congress to finalize legislation to dismantle Obamacare by mid-summer, according to a source familiar with the Speaker’s comments.
Originally expected to unveil tax reform legislation in the spring, Republicans are under pressure from business lobbyists to make good on campaign pledges to reform the tax code and pass healthcare legislation.
Lawmakers also need legislative victories to stave off Democratic challenges in next year’s congressional mid-term elections.
“What Ryan needs to do is refocus folks on the rationale for having tax reform, not just the political rationale, but the economic rationale,” said Jeff Kupfer, a former economic adviser to President George W. Bush.
Markets have been anticipating lower taxes. Major stock indexes have hit multiple record highs from Trump’s election to the end of the first quarter, on bets he would improve economic growth by cutting taxes and boosting infrastructure spending.
The tax reform debate has largely moved behind closed doors, where Ryan is trying to hammer out an agreement with Senate Republican leader Mitch McConnell, Treasury Secretary Steven Mnuchin, White House economic adviser Gary Cohn and Republican chairmen of the two congressional tax committees. The aim is to unveil tax reform legislation in September.
Outside those discussions, lawmakers have begun to talk about legislation that would do little more than cut taxes, with temporary reductions financed by the federal deficit.
Reporting by David Morgan; Editing by Chris Sanders and Jeffrey Benkoe