This is supposed to be the year that Washington finally locks arms and tidies up the littered Tax Code.
Don't count on it.
In a perfectly divided Washington, a mix of politics, policy and personality has made a comprehensive rewrite of the nation's tax system -- a top Republican priority -- increasingly elusive in 2013, aides and lawmakers say.
The fiscal cliff has deepened distrust between the two parties. The politics have become riskier and more complicated. Time is short. And Washington has to first endure battles over the debt ceiling and scheduled spending cuts before tax reform can come under serious consideration.
"We're starting from ground zero in doing this," said Rep. Jim McDermott (D-Wash.), a member of the tax-writing Ways and Means Committee. "They have this object out there -- this kind of mythical goal -- but there's no basis in fact of people actually working together."
Rep. Devin Nunes (R-Calif.) was more blunt: "I'm not overly optimistic."
Privately, that sentiment is echoing through the corridors of power in Washington.
The latest wrinkle came Thursday. House Republicans were deeply discouraged by President Barack Obama's nomination of Jack Lew as his new treasury secretary. Lew, according to sources, has privately expressed vocal opposition to moving toward a territorial tax system -- a staple of GOP plans for corporate tax reform.
But practical reasons also make a second "Showdown at Gucci Gulch" unlikely.
The highest hurdle to a deal, perhaps, is the fact that Republicans insist that a rewrite of the Tax Code cannot generate more revenue for the federal government -- while some Democrats favor a tax overhaul that raises revenue.
Indeed, the GOP is already trying to beat back efforts from Democrats to raise revenue as part of deals to raise the debt ceiling and get past sequestration.
"A balanced approach to replacing the sequester with spending cuts and revenue should accelerate tax reform, and I believe it is fully possible this year if we work on a bipartisan basis," Michigan Rep. Sander Levin, the top Democrat on Ways and Means, told POLITICO.
Republicans say they only want to look to revenue as a tool to help lower rates in the context of fundamental tax reform.
There also will be big clashes over how low tax rates should be and whether to reduce the number of tax brackets on the books. Republicans want to push top rates down to 25 percent with just two tax brackets, while Democrats are still crowing that they were able to actually raise rates and make the tax system more progressive in the fiscal cliff deal.
But there's more.
Tax reform would almost certainly have to come in 2013 to avoid the political pitfalls of an election year -- but the year is quickly filling up. At a minimum, the next three months will be dominated by trying to solve the debt ceiling, government funding and the sequester.
Then, Obama wants to muscle gun legislation and an immigration overhaul through on Capitol Hill.
Top House aides are also extremely wary about having their members navigate the land mine-laden field of tax reform if the Senate isn't moving through its own process at the same time. And House GOP aides who are worried about the possible political exposure say they're concerned about the prospect of a floor vote on tax reform if the Senate won't take it up. One aide said such a move could become an "exercise in Republican gymnastics."
Think about this: Republicans will almost certainly have to vote on eliminating or curbing popular tax credits on charitable deductions, education and home mortgages.
Still, these same aides concede they might have to put their members through the political wringer so they can say they've offered up a tax reform bill.
It wasn't long ago that the atmosphere seemed just right for an overhaul. After the election, top Republican lawmakers and aides were convinced that Congress and the White House would agree to a fiscal cliff deal that put in place a process to reform both the individual and corporate Tax Code.
Obama is in his second term, never to face the voters again. And Boehner, in the twilight of his career, has been salivating at the opportunity to firm up his legacy.
Senate Finance Committee Chairman Max Baucus (D-Mont.) has made clear that he would like to rewrite tax laws this year, though many Republicans question just how many Democrats he'll be able to bring along with him.
The tax-writing committees of both chambers have held dozens of hearings over the past several years to delve into various elements of tax reform.
Ultimately, the biggest question in the tax reform riddle is how the White House might proceed. For several years now, Obama has spoken glowingly of tax reform. But beyond releasing a white paper last year outlining changes to the corporate tax system, the administration has done little to lead on the issue.
That -- combined with the GOP's lack of trust in Lew -- is fueling the skepticism.
House Ways and Means Committee Chairman Dave Camp "and some folks in the Senate will do everything we can to push for a complete overhaul," Nunes said. "But you know you're not going to get anything done without the White House."
Logistics aside, House Republicans badly want to rewrite the Tax Code. One of the few bright moments during a New Year's Day meeting among House Republicans on the fiscal cliff came when Camp told his colleagues that the final deal could make tax reform easier by removing confusion over budgetary baselines. His comments were met with loud applause.
And the agenda for the 113th Congress is far from set. House Republican leadership plans to spend Sunday and Monday outside Washington at their Elected Leadership Committee retreat, where they'll work on their plans for the next two years.
On Wednesday, the entire House Republican Conference will head south to Williamsburg, Va., for its annual legislative planning session.
Any effort to put tax reform on the back burner would be deeply disappointing to GOP lawmakers who are still smarting from a fiscal cliff deal that broke decades of party orthodoxy by allowing rates to rise on top earners.
Tax reform "is what we've been working toward," Rep. Kevin Brady (R-Texas) told POLITICO. "That's, I think, a key reason many Republicans ran for Congress -- to fix this broken Tax Code."
Many Republicans -- especially those on Ways and Means -- are pushing the party to plow ahead, even if they're on their own for now. Well before the fiscal cliff standoff was resolved, Camp pledged late last year to pass a tax overhaul through his committee in 2013.
"After the last six weeks, House Republicans are now convinced that Barack Obama is not a leader," said Ohio Rep. Patrick Tiberi, a Ways and Means Republican close to Boehner. "Unfortunately, we're not going to have a president like in 1986 who was critically important to tax reform, so we'll have to do it through the legislative process."
Tennessee GOP Rep. Diane Black told POLITICO it doesn't make sense for House Republicans to wait on others before acting.
"You cannot move your body that you're currently serving in dependent on what you think someone else is going to do, either the Senate or the White House," she said. "Certainly, we need willing partners in getting this done at the end of the day, but if we do our job in Ways and Means in preparing people and corporations for where we want to go, I think that's what we have to do. I don't think we wait and say, 'Maybe we should wait until the White House is ready, or the Senate is ready.'"
A Ways and Means GOP aide argued that moving forward would create some momentum.
"Nobody wants to be seen killing tax reform," the aide said. "If the committee and the House can produce a bill, it's going to put a lot of pressure on others to step forward."
Work toward tax reform is continuing even if skepticism is growing on Capitol Hill about the prospects of an overhaul. Camp and Baucus have been working behind the scenes. Their most recent meeting was last week, sources said.
Baucus has huddled frequently with outgoing Treasury Secretary Timothy Geithner. He spoke with Lew on Wednesday to start building a relationship with the man who could be a deciding factor in whether 2013 ends with tax reform as a tired political talking point -- or the new law of the land.
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