Magazine article Insight on the News

Archer's Reforms Are GOP Means to Fiscal Ends

Magazine article Insight on the News

Archer's Reforms Are GOP Means to Fiscal Ends

Article excerpt

As chairman of the House Ways and Means Committee, Bill Archer of Texas is paid to worry about high taxes. Perhaps he should worry about bad karma instead.

After all, the Houston Republican occupies the same office in the Longworth House Office Building that was once used by a fellow Texan who had to leave town ignominiously a few years ago -- former Speaker Jim Wright, who resigned in 1989 under fire for ethics violations. Incidentally, Archer's committee office is the same one used by former Ways and Means czar Dan Rostenkowski, who was defeated last year while under indictment for alleged financial wrongdoing.

But don't expect the ghosts of derailed political careers to haunt the new chairman. After nearly a quarter-century in Congress, Archer stands apart from his predecessors in the chairmanship of the Ways and Means Committee.

It's not just a question of party affiliation. Archer says he also is the first chairman of the tax-writing committee in recent years to personally prepare his own income-tax returns. This gives his efforts at tax reform added impetus. "I'll either change it or suffer through it like everyone else," the chairman tells Insight.

Certainly, Archer's position places him on the front line of the 104th Congress' political battles. All legislation dealing with revenue passes through the Ways and Means Committee, which places the panel at the center of the GOP effort to fulfill the "Contract With America."

The contract's Personal Responsibility Act calls for a major overhaul of welfare programs; the Family Reinforcement Act includes tax incentives for adoption and a tax credit for elderly dependent care; the Senior Citizens Fairness Act would repeal 1993 tax hikes on Social Security benefits and provide tax incentives for private long-term care insurance; and the Job Creation and Wage Enhancement Act includes a capital-gains tax cut as a key components.

These reforms, along with the other contract items, are supposed to be voted on during the first 100 days of this session. Once the contract is dealt with, the Ways and Means Committee immediately will have to begin work on the 1996 budget. All in all, it's "going to be some very heavy lifting for us"' acknowledges Archer

"In fact, we're going to have two reconciliation bills"' he adds. "We'll have one to implement the contract, and then we'll be coming right back shortly thereafter to have another reconciliation to get us on the glad path to a zero deficit in 2002."

Certainly Archer has his hands full. But even while Congress debates and votes on the contract, Republicans are setting the stage for a broader policy debate -- one that seeks to change the very nature of the tax system.

Republicans almost unanimously say that reform of the current tax system is needed -- but they sharply disagree about what form that reform should take. Majority Leader Dick Armey of Texas wants support for a flat income-tax rate to become part of the 1996 GOP platform -- and part of their 1997 legislative agenda. Senate Budget Committee Chairman Pete Domenici of New Mexico wants to eliminate taxes on savings and investment. And from the catbird seat at Ways and Means, Archer is trying to prepare the GOP and the country to accept the most radical proposal of all -- that the income tax be replaced by a broadbased consumption tax.

Archer argues that disputes of the future may be solved in the world marketplace rather than on the battlefield, and that the United States needs a tax code that recognizes the importance of international competition and American exports. The best answer, he argues, is a broad-based consumption tax -- sort of a national sales tax -- which would satisfy five essential goals.

These include: simplifying the administration and enforcement of tax laws; enabling taxes to be collected from the "underground economy" -- which some experts estimate could bring in as much as $200 billion in additional revenue each year; encouraging savings; guaranteeing a method of raising revenue that can be removed from the price of exported products; and providing a tax that can be levied on incoming foreign products. …

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