Senate Finance Committee Chairman Max Baucus said Monday that if lawmakers don’t act to rein in the nation’s debt and deficits the U.S. could be headed toward a “fiscal crisis like some European countries.”
Baucus, D-Mont. (left), said in a speech at the Bipartisan Policy Center in Washington that any tax reform plan “must be developed with a sound budget in mind that reduces deficits and debt.”
But a panel of tax experts agreed after Baucus’ speech that any tax reform or deficit and debt reduction plan would not occur before the presidential election in November, and would likely come next year.
Baucus said that while the U.S. has to get its “fiscal house in order,” as today “the debt-to-GDP ratio is 73%, the highest it has been since World War II,” the deficit is not the nation’s only hurdle. Since the last major tax reform in 1986, Baucus said, the world has “changed drastically” and the tax code hasn’t kept pace. It is “now acting as a brake on our economy when we need to move at full speed. It’s time we had a tax code for the 21st century.”
After his committee began a “comprehensive review” of the nation’s tax system last year, Baucus said that he’s “making progress on a detailed tax reform proposal that will attract bipartisan support.”
Baucus said that he will be holding hearings soon to discuss the deficit reduction proposals put forth by Alice Rivlin and former Senator Peter Domenici, the authors of the Bipartisan Policy Commission deficit reduction proposal, as well as the proposal put forth by the National Deficit Commission, better known as the Simpson-Bowles commission, “to better understand the tradeoffs” of each plan.
In reforming the tax code, Baucus said, “My view is everything is on the table.”