- The Washington Times - Friday, March 3, 2017

U.S. Commerce Secretary Wilbur Ross said a border-adjustment tax like the one being pushed by congressional Republicans would be a “powerful mechanism” to balance the budget but did not endorse the specific proposal they’re lobbying for on Capitol Hill.

“We have to balance” the budget, he said on CNBC. “Border adjustable is certainly one powerful mechanism for doing that, but let’s see what else evolves.”

There has been an intense internal GOP debate over imposing the 20 percent tax on imports in order to raise about $1 trillion over the course of a decade.

“I think there will be something found to fill the trillion-dollar hole. Whether it will be exactly border adjustable — and if it is border adjustable, whether it’ll be in exactly the same form and size — is an open question,” Mr. Ross said in the Friday interview.

“I haven’t said that we’re in accord with anything like a 20 percent border adjustable tax,” he said.

Proponents have said the move would end a “made in America” tax and encourage U.S. production, since foreign-made products sold in the U.S. face a lower tax burden than American-made ones.

But opponents say the tax will ultimately get passed on to consumers and wouldn’t necessarily strengthen the dollar enough to make the math work.

“The theory of border adjustable is the currencies would readjust and therefore it would be a zero-sum game,” Mr. Ross said. “I’m a little skeptical about the theory that there’s somehow a totally free lunch and that the markets will exactly absorb everything.”

“But we do need to do something to fill that hole,” he said.

With buy-in from Democrats unlikely, the GOP is counting on that $1 trillion revenue stream to pay for lowering other taxes, and so a failure to come to an agreement could sink the prospect of broader tax reform this year.

Mr. Ross said that given the partisan atmosphere in Washington, Republicans might have to use the reconciliation process to get tax reform through.

Reconciliation is a legislative tool that allows budget-related legislation to be cleared with 51 votes in the U.S. Senate, rather than the 60 votes it typically takes to break a filibuster.

Republicans currently hold an effective 52-48 majority in the Senate, and at least several GOP senators have already expressed skepticism about the tax.

Mr. Ross also talked about a plan to be “aggressive” on trade.

“Because we know that the deals that have been made historically have resulted in the great loss of manufacturing jobs, great amount of closures of manufacturing businesses,” he said. “We don’t want that to continue.”

He said a first emphasis will be on “facilitating U.S. exports to other countries — getting rid of both tariff and nontariff barriers to trade,” Mr. Ross said.

“The other side of that will be preventing illegally subsidized goods from coming in and really enforcing it,” he said.

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