Sen. Reid: No Tax Reform Without 'Significant' Revenue Increase

Senate Majority Leader Harry Reid says he's instructed Senate Finance Committee Chairman Max Baucus to include a "significant revenue" increase in any tax-code reform bill he helps write.

The Nevada Democrat made the comments, which some conservatives suggested could hinder efforts to produce a bipartisan tax-code overhaul measure this year, during an interview Thursday with The Wall Street Journal.

His comments appeared to signal a potential divide between himself and Baucus, a Montana Democrat who has been working with Republican Sen. Orrin Hatch of Utah and House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, to produce a bipartisan bill that can get through both chambers of Congress.

"I've explained this to Sen. Baucus," Reid said. "I don't want anyone going into these negotiations with the illusion that they can come back with a small [revenue increase] number, and we'll gobble it up under the guise of tax reform."

Without a revenue increase, Reid said, negotiating with Hatch "would be a waste of time" if Baucus hopes to keep Democratic support in the Senate for a tax overhaul plan.

Commenting on Reid's remarks, an aide to Baucus told the Journal that his boss and the majority leader actually are in agreement.

"Sen. Baucus has been saying for more than a year now that he is working on a comprehensive tax-reform bill that will raise significant revenue," the aide said. "That has never changed, nor will it."

Reid told the Journal that he recently spoke with Baucus about the tax bill because "I just want to make sure that when they go into serious negotiations, that [Baucus] understands that there is no need to play games with Hatch," Reid said.

Reid raised another point of contention between Democrats and Republicans when he said that a tax bill that doesn't overhaul corporate and individual taxes at the same time will be "extremely difficult" to pass.

"My gut reaction is, I'm not sure you can do them independently," he said.

President Barak Obama said this week that he wants a corporate tax bill with revenue increases that would go towards improving roads and bridges, job training, and other programs to help create new jobs.

Obama prefers a bill that would overhaul both individual and corporate taxes, but a White House official said the president understands that "a compromise on individual tax reform does not seem possible in the near horizon" because it will be difficult to get both parties to agree on.