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Business-minded senators have simple strategy for tax reform: Avoid ACA tactics

Mike Juang, Special to CNBC.com
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U.S. Senator Jeanne Shaheen (D-NH) speaks to reporters at a campaign stop at the Firefly American Bistro in Manchester, New Hampshire September 29, 2014.
Brian Snyder | Reuters

To pass tax reform that will spur business growth, politicians in Washington, D.C., need to follow two simple orders: Don't do what the Democrats did in writing the Affordable Care Act back in 2009, and don't do what the Republicans just tried to do in failing to repeal and replace President Obama's signature health care legislation.

That was the message delivered by Republican Sen. James Risch of Idaho and Democratic Sen. Jeanne Shaheen of New Hampshire on CNBC's Power Lunch on Thursday — both of whom serve on the U.S. Senate Committee on Small Business & Entrepreneurship. The senators cited an idea that's been out-of-favor on Capitol Hill: Bipartisanship.

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For legislation on tax reform to be successful, Shaheen said that it needs to go through regular orders and processes in the Senate. "Have committee hearings to listen to what people have to say, to listen to the experts and then to work together in a bipartisan way," Shaheen told CNBC. "That's what the American people want and I think that's what the majority of our colleagues want."

Sen. Risch sees clear lessons to be learned from health care — on both sides of the aisle.

"With all due respect, in 2009, it wasn't done through regular order," he said, referring to the introduction of the Affordable Care Act. And when the Republican-controlled Congress tried to repeal the ACA, "We didn't do it through regular order."

"Neither one of them worked very well, everybody is in agreement," Risch said.

After the Republican bid to repeal the Affordable Care Act failed during a dramatic vote last week, the two senators called for a re-think on how legislation is drafted and passed in a politically polarized climate. President Trump has made it clear his administration next intends to tackle tax reform.

According to a recent CNBC/SurveyMonkey Small Business Survey, taxes are cited by 25 percent of business owners as the most critical issue. Taxes are the No. 1 issue cited by entrepreneurs — regulation, customer demand and the cost of employee health care all tied for second at 14 percent. Passing tax reform will require the cooperation of an exhausted and divided Congress. "We just went through the health care thing and people are tired," Risch said. "This was a very difficult exercise."

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The opacity of tax reform also vexes the senators. "I don't know if we can agree or disagree at this point because we haven't seen the details," Shaheen said.

"Everyone wants answers, particularly when it comes to what the spending will look like and what a tax reform package is going to look like and what the debt ceiling is going to look like," Risch said.

The Small Business & Entrepreneurship Committee is a bipartisan Senate group set up to research and address the problems facing small businesses in America. Risch was named as chairman of the committee in January, and Shaheen serves as ranking member on the committee.

—By Mike Juang, Special to CNBC.com