National Journal
October 04, 2012

Two for the Show

Max Baucus and Dave Camp have struck up an unlikely friendship within the polarized Congress, and it could help pull the country back from the precipice.

Amid the wreckage of this session of Congress, where gridlock was the norm and partisan sniping the stock-in-trade, Sen. Max Baucus, a Democrat, and Rep. Dave Camp, a Republican, have emerged as unlikely friends. It’s a relationship—and a possible alliance—that could help resolve two of the most intractable issues facing the nation: the impending fiscal cliff and the overcomplicated tax code.

As the leaders of the Senate Finance Committee and the House Ways and Means Committee, the two talk at least once a week when Congress is in session. They sat next to each other during President Obama’s State of the Union address, prompting staff to jokingly call them one another’s prom dates. More recently, their committees have held three joint hearings on tax reform; the last time the two tax-writing panels did something similar was 70 years ago to talk about a war-profiteer tax. Baucus and Camp also worked to pass trade agreements and an extension of the payroll-tax holiday. They sat on the president’s fiscal commission and the super committee in the fall of 2011.

“One of the few good things that came out of the super committee, and there weren’t a lot of good things, was that Camp and Baucus and their staffs spent a lot of time together and found much more common ground on the path toward reform than I think either might have thought going in,” says Jonathan Traub, former Republican staff director for the Ways and Means Committee and a managing principal at Deloitte Tax LLP. “This is not to say they’ve cooked up a deal and know where they want to go, but they’re not going to start from a position of total ignorance.”

That’s why congressional staffers, budget hawks, and lobbyists are watching the duo closely in the weeks leading up to the lame-duck session, when Congress must tackle trillions of dollars in tax and spending policy—from the expiration of the 2001 and 2003 Bush tax cuts, to the mandated budget cuts from the sequester, to the business community’s beloved tax extenders.

Apart from showing rare, bipartisan collegiality, the relationship between Baucus and Camp could help dictate policy. After all, they both support a simpler tax code, with lower rates and some type of worldwide taxation system (a variation on the territorial corporate-tax concept that Camp has championed).

If Obama is reelected and the lame duck engages in a two-step process, as is widely discussed, the top tax writers will be in a position to wade into the policy details they love. Under this scenario, Obama and congressional leaders would cut the framework of a big deal in the weeks following the election, including specific targets for spending cuts and revenue. Then, they would ask the tax-writing committees to fill in the design of the proposal under a deadline.

“The technical stuff gives Baucus and Camp a moat to keep others out of their business,” one tax lobbyist quips. It also gives them freedom to operate at a time when most deal-making occurs at the leadership level.

Part of their shared history involves a propensity to not always play along party lines. Camp, who worked as a congressional staffer before representing his Michigan district, took on his own party in the 1990s, siding with President Clinton rather than Newt Gingrich over welfare reform. Camp has also expressed some openness to increasing revenues. During the super committee’s sessions, he and Baucus engaged in a last-ditch negotiation to try to find $600 billion in revenue to strike a deal.

Baucus, similarly, has not always aligned himself with liberals. He voted with the Republicans on the 2001 tax cuts, as well as the Medicare prescription-drug benefit—two policies that progressive Democrats now decry for the way they blew deep holes in the deficit. If the Democrats maintain their control of the Senate by a slim margin in November and the junior senator from MontanaJon Tester, loses his seat, then lobbyists and Republican staffers predict that Baucus will tack toward the right to avoid making himself a political target.

“I don’t think either of them is in a tight partisan box, and both are willing to venture outside of it,” says Marc Goldwein, a former aide on both the fiscal commission and the super committee and now the senior policy director of the Committee for a Responsible Federal Budget. “Both men wanted to find a way to get to a deal during the super committee, and both talked about tax reform that guts tax expenditures. I doubt they agree on every deal, but I bet they could find a tax plan that they could both agree on.”

This isn’t to say that this single bipartisan friendship can save Congress from itself. Baucus and Sen.Chuck Grassley also famously had a great relationship on Senate Finance, but that still did not convince Republicans to vote for the health care bill. “My priority here is on working together and getting the best result for Montana’s working families and the American people,” Baucus says. “This isn’t about keeping score or partisan politics.”

There are other reasons to push for some lasting agreements. Camp has just two more years as head of the powerful Ways and Means Committee before he’s out because of committee term limits. (He has also spent the fall receiving chemotherapy treatments for a largely curable cancer.) Baucus could face a tough reelection fight in 2014. Those realities could have both lawmakers thinking seriously about potential legacies as the men who successfully forged a bipartisan overhaul of the tax code.

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