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Barack Obama, Paul Ryan, and Dave Camp: unpacking budget and tax reform proposals

Between President Barack Obama's budget proposal Tuesday, Rep. Paul Ryan's anti-poverty program takedown Monday, and Dave Camp's tax reform proposal last week, partisan fiscal talks are buzzing in Washington. But they may not be as different as you think.

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J. Scott Applewhite/AP
Copies of President Obama's proposed budget for fiscal year 2015 are set out for distribution by the Senate Budget Committee, on Capitol Hill in Washington, Tuesday, March 4, 2014.

Over the past week, three senior Washington lawmakers released foundational documents that describe both their agendas and their perspectives on government. On one level, they paint vastly different pictures. Yet, a close reading also pinpoints some surprising and important areas of agreement鈥攎ore perhaps than the players would publicly admit.

President Obama鈥檚听聽is hot off the presses. His tax and spending blueprint released today would boost revenues by about $1 trillion over the next decade, with the new money divided between funding new programs and reducing the deficit. As the president predicted in his State of the Union address, his budget focuses on improving the economic well-being of the middle-class. And he鈥檇 fund many of those initiatives by raising taxes on high-income households.

Obama鈥檚 plan also includes what he describes as a revenue-neutral business tax reform aimed at both small firms and big multinationals. The details of the proposal are not too different from what he laid out last year.

But Obama鈥檚 budget was not released in isolation. Yesterday, House budget Committee Chair Paul Ryan (R-WI) released a聽聽on the federal government鈥檚 anti-poverty programs. It was, for the most part, a scathing criticism, though even it found a bit of common ground with Obama, especially when it comes to the Earned Income Tax Credit鈥攚hich both like.

The document serves as something of a roadmap for Ryan鈥檚 future agenda. The Wisconsin lawmaker wants to be the next chair of the House Ways & Means Committee, which has jurisdiction over many of the programs he so dislikes. He鈥檚 also mentioned as a possible 2016 presidential candidate.

Yet, Ryan鈥檚 report was only a critique of existing programs. It made no recommendations on how to reform any of the poverty programs that Ryan believes have failed, though his upcoming budget plan may include some.

Finally, there was the聽聽House Ways & Means Committee chair Dave Camp released last week. Camp鈥檚 proposal, far different in tone and substance from Obama鈥檚 and Ryan鈥檚 volumes, was a painstaking, item-by-item rewrite of the tax code.

Whether you agree with his proposals or not, give Camp credit: For the most part he didn鈥檛 flinch from the dirty details. He identified exactly which popular tax subsidies he鈥檇 kill and described just how he鈥檇 do it. Unlike many recent tax reform plans, he didn鈥檛 hide behind the black box of unidentified 鈥渓oophole closers.鈥 He gored an entire herd of oxen and as a consequence has been largely abandoned, even by his own party leadership.

Yet Camp also shares common ground with Obama on a wide range of tax issues. Both back business tax reform and both would raise taxes on hedge fund managers. Both would cap the value of tax deductions for high-income families鈥擮bama at 28 percent and Camp at an even less generous 25 percent. The two men would close a loophole that allows owners of personal service firms to dodge self-employment taxes. And both would pay for infrastructure spending with some temporary tax revenues they鈥檇 generate from rewriting business taxes.

This does not mean they are ready to sing kumbaya together. In important respects, Camp and Obama鈥檚 approaches to tax policy are vastly different. Obama wants to raise taxes overall and Camp wants to keep revenues the same as under current law. Obama would boost taxes on the rich while Camp wants everyone to pay roughly the same share of tax they do now. Obama wants to fund new spending. Camp does not (except for his infrastructure piece). Obama largely protects special interests favored by Democrats while Camp is not shy about zapping聽some GOP favorites.

And both men were constrained by political reality. Obama鈥檚 budget was written with the 2014 congressional elections in mind, which explains why he backed off proposals such as one to limit increases in Social Security benefits. Camp had to design a tax code that would raise roughly as much as current law and set a top individual tax rate of 25 percent. In the latter he ultimately failed, but it forced him to rely on an unsettling number of gimmicks to make it look as if he had met the goal.

Still, the plans show there is the potential for consensus in Washington on some narrow, but important issues. Not cosmic tax reform, perhaps, but meaningful change. There is a middle ground, even if few politicians are interested in playing on it.

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