Ryan, Murray Propose Commission That Could Affect Tax Credits

Published by Michael Novogradac on Monday, December 1, 2014 - 12:00am

House Budget Committee Chairman Rep. Paul Ryan, R-Wis., and Senate Budget Committee Chairwoman Sen. Patty Murray, D-Wash., recently introduced legislation to establish a new bipartisan commission could have a significant effect on the tax credit community–although many details are uncertain.

The Ryan- Murray legislation would create a 15-member panel to consider whether to and how to consolidate data about the effectiveness of federal spending programs and tax breaks.

The legislation, called the “Evidence-Based Policy-Making Commission Act of 2014,” would create a panel consisting of three appointees each by President Barack Obama, the Senate majority leader, the Senate minority leader, the House speaker and the House minority leader.

The legislation requires the panel to report back within 15 months after its appointment. However, to issue the report, the bipartisan panel would require three-fourths agreement (presuming it’s a 15-member panel, that’s at least 12 members agreeing), so there’s no guarantee a report would be issued. If agreement was reached, the report could ultimately recommend an “optimal arrangement” for consolidating data on programs and tax expenditures’ effectiveness. It could also suggest how to make that data available for researchers and how to incorporate the measures of effectiveness into the design of programs.

Congress has attempted to deal with tax expenditures in the past and this is a new approach to an old problem. For decades, policymakers have struggled to find objective, accessible data to measure whether programs or tax breaks have their intended effect. The Ryan-Murray plan attempts to create a neutral clearinghouse for data and make it accessible to multiple levels of policymakers who would use the data to evaluate whether tax expenditures should remain in the tax code.

Ultimately, what will be most important to the tax credit community–and to everyone affected by legislative decisions made based on the data–is the source and type of evidence and data used to compile the information. However, it doesn’t look likely that the bill will be considered in what little time is left of the postelection lame-duck session. The 113th Congress is expected to adjourn by Dec. 12. And if it is not passed this year, the bill would need to be reintroduced. Rep. Ryan will no longer be House Budget Committee Chairman next year; he will be replaced by Rep. Tom Price, R-Ga. And Sen. Murray will no longer be Senate Budget Committee Chairwoman; she will be replaced by Sen. Jeff Sessions, R-Ala., or Sen. Mike Enzi, R-Wyo. Sen. Murray may not even be the ranking member of the committee; she is likely to seek becoming the ranking member of the Health, Education, Labor and Pensions Committee.

Nonetheless, it is certainly worthwhile to keep an eye on this proposal and to see if the Ryan-Murray plan advances in the lame-duck session, or reemerges in the future.

In the meantime, you can hear more about the plan in the Nov. 25 Tax Credit Tuesday podcast.