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The House GOP’s Economic Priorities

The Wall Street Journal

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Washington, November 22, 2016 | comments

Kevin Brady, chairman of the House Ways and Means Committee, talks taxes, ACA, Medicare and trade

On the campaign trail, Donald Trump made sweeping statements about his plans for American business. How do Republican lawmakers assess the situation?

The Wall Street Journal’s Paul Gigot spoke with Texas Republican Kevin Brady, chairman of the House Ways and Means Committee, who will oversee issues such as trade and taxes. Here are edited excerpts of the discussion.

MR. GIGOT: Is it fair to say that your top two priorities next year are tax reform and replacing the Affordable Care Act?

REP. BRADY: This new president is making economic growth the pillar of his presidency. And both of those play key roles in it.

MR. GIGOT: Are you willing to separate corporate-tax reform from individual-tax reform?

REP. BRADY: I would advise against doing that because we want to grow. We have two overall arching goals in tax reform. We want a tax code not designed merely to wring money from you, which is the one we have today. A tax code actually built for growth, designed to grow wages, jobs in the U.S. economy. And our other goal is to leapfrog America from dead last among our global competitors back in the lead, and keep us there going forward.

MR. GIGOT: Donald Trump has proposed a corporate-tax rate of 15%. Your proposal is 20%. Can you get to 15%

REP. BRADY: I think we can find common ground on the rate.

The design of where we’re at today costs us jobs and growth. We want the business rate to bring those earnings back to America to be zero. We want to level the playing field to make sure made-in-America products and new technologies can compete and win here and abroad.

The ACA question

MR. GIGOT: Let’s move on to health care, which is also your portfolio.

REP. BRADY: I think it’s important that every American has the freedom to buy the health care they need, and to take it with them throughout their lifetime without bringing in new taxes.

We have to unlock the current tax break you get at work to be able to carry that health-care plan with you from job to job, state to state. We would argue if the health-care plan works right for you into your retirement years as well, then having the freedom to get the help you only get now at work is pretty critical.

MR. GIGOT: You want to repeal the ACA, I assume?

REP. BRADY: Repeal the mandates, the taxes, the directives. There are in the ACA federal agencies, bureaucrats and commissions essentially in between you and your doctor. That’s one of the drivers of why this thing can’t simply be tweaked. You have to start over in a big way.

But I also think it’s important to retain some of the items that we think have strong public support. Letting kids stay on their health-care plan till 26. Pre-existing illnesses, making sure there’s not a lifetime cap because if you happen to have a child or you got a very costly disease early in life, you’ll bust through those early.

MR. GIGOT: Would your goal ultimately be to create an individual marketplace that allows a seamless movement from employer-sponsored care and equalizes a tax treatment between employers and individuals?

REP. BRADY: Yes. It’s really important to keep employer-sponsored health care. But we need individuals to be able to take it with them.

Or for those who aren’t working for the company that offers, you know, grade-A health care, we’ve got to be able to give people the freedom to pick a plan that’s right for them, to take it with them throughout their lifetime. And we think that’s the most streamlined, conservative approach.

MR. GIGOT: Is Medicaid going back to the states?

REP. BRADY: Yes. It has to, because the costs at the state level are unsustainable. When President Obama essentially said, “Look, the solution to your big problem is to make your problem bigger, do more Medicaid for more people at a higher cost,” he exacerbated the problem. We have to fix and create 21st-century health care. Giving states the flexibility to design it for their state is critical.

MR. GIGOT: Is Medicare reform on the table with the premium-support plan House Republicans have passed before?

REP. BRADY: Medicare’s not the 800-pound gorilla in the budget, it’s the 8,000-pound gorilla. You won’t save it by just cutting benefits. You’ve got to redesign it.

MR. GIGOT: The president-elect has proposed putting tariffs on goods from American companies if they move operations overseas and then try to sell those goods back into the United States. Do you support that kind of a policy?

REP. BRADY: If the president wants to grow the economy, and he sincerely does, you’ve got to get the tax code right, you’ve got to get balanced regulation right. But we need more customers around the world.

So you need to get trade right, as well. It’s critically important that he give us a chance to make the case.

So, strictly enforce these trade agreements that are critically important to turn one-way trade into the U.S. into two-way trade. I hope that my advice would be not to withdraw from the TPP, not to withdraw from Nafta. Take the opportunity to make those agreements better.

I hope he takes the broader view, and on tariffs like that that drive up costs, essentially punish America for another country’s behaviors, I hope he takes a good, thoughtful approach to all that.

MR. GIGOT: You mentioned TPP. But that seems to be dead. Would you concede that?

REP. BRADY: No. I’d say it’s on hold. For a critical reason.

It’s not enough, as you know, to simply buy American. We have to sell American all throughout the world. That Asia-Pacific region will hold half of all the middle-class customers on the planet by the end of the decade. We want to be in there. And if we withdraw from that field, our economy suffers.

So, I’m hopeful the new president gives us a chance to make the case to keep what’s good in trade and creates jobs, and fix what’s perceived to be bad. And there’s plenty of that area for him to tackle with his skills.

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