So thank you for your leadership. Hearing is adjourned. Later today the Brookings Institution hears from tony blinken to talk about current priorities and future prospects for u. S. Engagement in central asia. That will be live on cspan starting at 3 30 p. M. Eastern. And Runoff Election scheduled for april 7th in chicagos mayoral race. Rahm emanuel faces his challenger chewy garcia. It is hosted by ttwtv in chicago. Neither won a majority this februarys election. You can see the Candidates Forum starting tonight at 8 00 on cspan. Today is the ted line for an agreement in the Nuclear Talks with iran. A reporter joined us this morning on washington journal to give us an update on the negotiations taking place in swizer land. Thomas erdbrink joins us on the phone. Thanks so much. Thanks for having me. What is the latest on the talks . There has been some reports of a possible extension by hour here. What are you hearing in tehran . Well, of course being in tehran means take im from the sidelines because im like other people here we dont know exactly what is going on. All that were understanding is the feedback were getting through the iranian media from the iranian negotiating team and it has been unclear what were hearing from the western negotiators, there might be a can deal later today. Of course they have this self declared deadline tonight when the day ends. And at the same time there is talk of extension. It has happened many times in the past. So definitely a possibility. So im very sorry that im not able to enlighten you more that i would like to. How would you describe how these negotiations are being described by the iranian media there . Are they optimistic, is it a pessimistic tone . I think most of the iranian newspapers and websites are following the trends of the negotiations. If the negotiating team says the negotiations arent going well then youll read that the negotiations arent going well. There is one main exception because one of the a state newspaper. They have been the only vocal voice against the talks. As of yesterday, one person came out and said that the deal was in shaping up. It will be a bad deal for iran. I dont think we will get everything we want. That shows how some people are thinking here. Overall, when you look at the media, everybody reflects the feeling that most iranians have. People want to see a deal and move on from these 10 years of Nuclear Debate and sanct feeling mostio iranians have. This i they want to move on from this ten years of Nuclear Debate and sanctions and this is something l reac you see reflected in the media. Ore and if there is a deal reached in the next several hours here before this deadline or if there is an extension and the deal is reached, who would ement you youon expect in iran to make the announcement on that side . Would it be president rohani the Supreme Leader coming out to talk about it somewhattit is this . What are you a fin hear something. I think it will not be so dramatic. This will be a temporary step towards the it deadline. Which is june 30. But it would disseminated through state Division News programs which is the main form of Mass Communication in this country. A this is how people would know there is or is not a deal. Appreciative the perspective from the ground there in iran. Thank you. Tonight on American History tv programs on the 150th anniversary of president abraham lincolns second inaugural. Less than six week before his assassination. At 8 00, an event commemorating the president s second inaugural inaugural. After that, a discussion on the making the making of his address. And then later the last speeches given by president lin con and Martin Luther king jr. Before their assassinations. Thats whats coming up tonight on American History tv on cspan3. In february, the Senate FinanceCommittee Held a hearing on the u. S. Tax code. Hearing from former senators both of whom were part of the 1986 tax deal under president reagan. Senator orrin hatch chairs the committee. Gas hearing is about the needs for tax reform and what we can learn from the Tax Reform Act of 1986 the last successful overhaul of the United States tax code. We have before us today two former senators who are key to that effort. I dont know why you call them former senators. I think you will always be senators to me. I look forward to hearing their thoughts and advice and i think we all did. We need a clear vision of what we want the system to look for and set a vision so how we want to change the opportunities for American Families and rye wards that americans receive from their labor, entrepreneurship and investment. Successfully reformed tax system will help make america the best place in the world to work conduct business invest and prosper. The successfully reformed tax system will be one that provides Economic Growth and is simple and fair. Land mark Tax Reform Act of 1986 was developed threw a careful and methodical bipartisan process that relied heavily on member input. Senator bradley was a key part of that process. And whole raft of others in the white house at that time. Over the last few would he bes, weve begun a similar process that we hope will yield a similar result. 1986 act signed into law by president reagan reformed a complicated tax system into a simpler one with lower tax rates for american households and businesses affording them greater personal prosperity. Over time our tax system has once again become costly, complex, impeding growth standing in the way of shared prosperity and place American Work he is and businesses at a distinct disadvantage. Put simply, it is past time for congress to stand up once again to fix our broken tax smg. Ive been making the case for tax reform. In december the republican staff produced a comprehensive report outlining the need for tax reform and providing some direction to our overall efforts. Im sure everyone here has read that report cover to cover. Ive laid out seven principles that i believe should guide our efforts. I wont go into much detail today and just talk about them briefly. First is Economic Growth. It should significantly reduce economic distortions. Second principle is fairness. Income tax base which has back riddled with exclusions, deductions and credits should be as broad as possible. It should broaden the tax base by eliminating other reducing the nim of tax except gi churs and removing distortions. The third principle is simplicity. Taxpayers and businesses spend over 6 billion hours a year complying with tax filing requirements. With annual Compliance Costs in excess of 171 billion. Which is more than the Gross Domestic Product of new zealand, for instance. Simplifying the tax code will result in greater clarity and compliance, and will free up resources for families, job creation, and other productive uses. The fourth principle is revenue neutrality. Tax reform should be revenue neutral and not an occasion to raise taxes on american households or businesses. General revenues already exceed their historic average as a share of our economy and greater revenue should not be an objective of reform. The fifth principle is permanence. The joint committee on taxation lists almost 100 provisions of the tax code that will expire over the next decade. This is unacceptable. Families and businesses should be able to plan for the future without wondering if the tax code is going to change from year to year. The sixth principal is competitiveness. The combination of a high Corporate Tax rate, worldwide taxation and the temporary nature of some tax incentives makes American Companies less competitive when compared to their foreign counterparts. Tax reform should reduce burdens on businesses, large and small, to allow them to more effective compete on the world stage. The seventh principle is the promotion of savings and investment. Many aspects of our current tax system discourage savings and investment, thereby hindering longterm growth. Savings and investment help build the capital stock, providing fuel for Economic Growth, and it generates prosperity for American Workers and businesses. These seven principles are the guideposts that we use when looking at tax reform proposals. I think were going to have an interesting hearing today. We have two really great former leaders, chairman packwood and senator bradley, to see what advice they can give us if we undertake our tax Reform Efforts in this congress. I did read showdown in guchi gulf and some indication of how difficult this was. If anything it may be even more difficult today, because of the mess that has occurred since, none of which you deserve to be blamed for. Senator widen . Thank you very much, chairman hatch. As chairman hatch noted, the finance committee is joined this morning by two legislators who are at the heart of the last Major Overhaul of the u. S. Tax code in 1986. Chairman packwood spent more time than anyone figuring out how to make the numbers in tax reform work. That is the tough work of legislating. Senator bill bradley was the intellectual godfather of the reform plan that broadened the base, closed loopholes, and kept progressivity in the code. Senator bradley lit the fire that got the Reagan Administration invested in reform. And i dont think anyone would question my judgment that senator bradley had by a wide margin the best jump shot in the senate tall guy caucus. Now if theres one obvious similarity between 1986 and today its that people are quick to say that tax reform is absolutely impossible. Americans say congress cant organize a twocar parade. Theres no way they could come to the on Major Economic legislation. So what happened three decades ago needs to happen again. Turning the impossible into the possible. The congress and president reagan came to the to pass the 1986 Tax Reform Act based on what i call principled bipartisanship. One side wanted to flatten the tax code. The other side wanted to close loopholes and guarantee that the tax code treated everyone fairly. Both sides said were going to set aside the partisan attack. Look for Common Ground, and each side came away with the feeling that it had upheld its principles. When president reagan signed the bill into law, he called it an historic overhaul of our tax code, and a sweeping victory for fairness. He continued, and i quote here, its also the best antipoverty program, the best profamily measure, and the best Job Creation Program ever to come out of the congress of the United States. Those same objectives guide the finance committee in the congress that works again to modernize our tax system. Reforming the tax code is always a herculean task. But the same strategy of principled bipartisan can work once again. The congress can turn the impossible into the possible. However, policymakers need to recognize that the process is going to look different. Not every part of a 30yearold game plan for tax reform can work today. China and india are now superpowers in the global economy. Which is a much bigger factor in the tax reform debate. The gulf between wage earners in the top of the income ladder has widened. And america is at its best when a rising tide lifts all the boats, and it should be obvious that making that reality that a reality once again is going to take some hard work. The status of the middle class across america is at the top of the list of compelling issues for tax reform to address. Its fundamentally unfair that a middle class wage earner could pay a higher tax rate than an affluent person whose earnings come entirely from investments. The tax code should not be used to punish the wage earner in america. Many tax incentives for College Education and Retirement Savings are simply out of whack. The support those incentives provide dont always get get to those who need them the most. And that ought to change. Another challenge is making america more competitive in the global economy. Today, look and come away saying our country is trying to win a road race in a 30yearold car. Our competition, meanwhile, trades up to more efficient models. America hasnt done enough to drive innovation at home, and worse, the tax provisions for research and development expire year after year. In 1986 there wasnt a lot of talk about the tax code. For example, and a Clean Energy Future for our country. Thats Something Else that has to change this time. And finally, modernizing our tax code has to be done in a fiscally responsible fashion. Tax reform cannot become an exercise in slashing rates at any cost. The biggest lesson from 1986 is that tax reform is possible, when democrats and republicans set partisanship aside, come together, and focus on shared principles. Over the years, ive talked frequently to senator bradley about how tax reform is always totally completely and thoroughly impossible until that moment when it happens. The finance committee today has two experienced, knowledgeable witnesses who are going to help us get closer to that point today. Chairman hatch, thank you. And i look forward to our witnesses. Mr. Chairman, mr. Chairman if i may have a point of privilege just for a moment . And i thank the chair very much. I am in an intelligence briefing on iran. But i wanted to come to join the committee and its leadership in welcoming the most outstanding United States senator new jersey has ever had to represent it. Not only does he have a great ability to shoot a threepoint shot effortlessly, but the intellect that bill bradley possesses, and his willingness to pass the ball to fellow teammates made him a consummate successful United States senator here in new jersey. So ive read his testimony. I look forward to the q a so we can engage in some of it, and i appreciate him and senator packwood joining us. Thank you, mr. Chairman. Thank you, senator. I think that was pretty of our senator. Our first witness is bob packwood. Senator packwood was first elected to the u. S. Senate in 1968, and served the people of oregon and this body for 26 years. He was chairman of the finance committee from 1985 to 1987 and presided over this committees efforts to draft and pass the Tax Reform Act of 1986. He made a typical difference in this, as did our other witness. He also served as chairman of the Commerce Committee for four years. And prior to his time in the senate, senator packwood practiced law in portland, oregon, for ten years. Was elected to serve for three terms in the oregon state legislature. He received a bachelors degree in Political Science from william f. University willamette. I got to pronounce that better dont i . And a law degree from university of new york law school. We feel honored to have you here today. We know you can help us in many ways to understand some of the difficulties were going to have to get through. And hopefully give us some advice on how to get through it. Our second witness is another great human being who i greatly admire and admired before he came to the senate, and thats senator bill bradley. Senator bradley represented the people of new jersey here in the senate for three terms. Beginning of 1979, and as a member of the Senate Finance committee he played a pivotal role in the drafting and passage of the Tax Reform Act of 1986. Of course prior to his time in the senate, senator bradley was a great professional basketball player. Hes a twotime nba champion and a member of the Basketball Hall of fame. Senator bradley holds a bachelors degree in American History from Princeton University and a masters degree from Oxford University where he was a rhodes scholar. He is the author of seven books on american politics, culture, and economy. And currently hosts american voices a radio show highlighting the remarkable accomplishments, both famous of both famous and unknown americans. We welcome you, senator bradley, as well. We thank both of you for being here today, and we look forward to your testimony. Senator packwood you go first. And senator bradley also holds a record for the most points ever scored in the play of basketball playoff in portland, oregon, when he scored what, 64 points . 58. Mr. Chairman, when i was contacted everyone asks how did you do it in 86, and are there any other parallels till today . There are some but the circumstances were different. In our era, fairness was the issue, not income and equality. And the next to the last page of my statement, you will see a list of newspaper stories about people that paid no taxes at all. Industries, Defense Industries at the time of the reagan buildup that not only paid no taxes, they got money back. And the public, and the members of congress, could not understand how wealthy corporations, and wealthy individuals could pay nothing. It wasnt fair. So that was the premise we were operating under at the time. You will find you will find in my statement on occasion the word diary. That means it was taken specifically from my diary at the time. Now, what happened. First tax reform is not a new