Bill to Sunset Tax Code Irresponsible, Summers Warns

Monday, March 9, 1998

OnLine

The bills pending in Congress that let the Internal Revenue Code expire are "profoundly irresponsible" because they could damage the economy, Deputy Treasury Secretary Lawrence Summers said March 9.

The progress that Congress and the President have made in solving the budget deficit problem will be reversed if Congress passes a bill that lets the tax code expire, Summers told business groups at a Treasury Department meeting. No tax code means no revenues, he warned.

Even though President Clinton will veto any sunset bill, businesses and individuals will not be able to plan confidently for the future with the sunset measures looming, and those benefiting from the charitable-contribution deduction, the mortgage-interest deduction, and similar provisions in the code will be harmed, Summers warned.

Several sunset bills are moving through Congress, but the bill (H.R. 3063) offered by Rep. Steve Largent, R-Okla., in the house and the bill (S.1673) offered by Sens. Tim Hutchinson, R-Ark., and Sam Brownback, R-Kan., are the most prominent.

The measures might be brought up for a vote during the summer to highlight for voters the GOP’s desire to reform the tax code. Supporters of the sunset bill argue that the tax code should expire to force a major overhaul of the tax system. The House bill has more than 150 co-sponsors, including about two dozen Democrats.

Irresistible force

Many members of Congress do not believe a sunset bill is a good idea, but it could prove irresistible in a election year, Deputy Assistant Treasury Secretary for Legislative Affairs Linda Robertson said.

Many members will view the vote on the bill as a free ride because even if it passes, the President will stop it by vetoing the measure, Robertson said. The fact that the measure will be considered by Congress creates a high level of risk on its own; this risk is not diminished by the fact that the bill will not be enacted, she warned.

Congress must be made aware of the risks associated with supporting the bills, the Treasury official said. Unless steps are taken, this is "something that will snowball and snowball very, very rapidly," Roberston said.

Opposition to the sunset bill should not be interpreted as the Treasury Department’s support for the status quo, Summers said. Many Republicans have "falsely portrayed" the Clinton Administration’s opposition as a defense of the status quo, he said.

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