Treasury Secretary Steven Mnuchin sent U.S. stock prices to adaytime high Thursday when he said the Trump administration willproduce an ambitious plan to overhaul the U.S. tax code “soon.”

But it's not the first time the administration has promised animminent plan, and the obstacles to a sweeping tax-code rewrite ofthe sort Mnuchin described Thursday haven't gotten any smaller. Akey Senate committee has yet to see final details of a White Houseplan, a congressional aide said. And tax-related challengespresented by the 2010 Affordable Care Act remain in place amidRepublicans' disagreement on how to dismantle the health-care lawthey've criticized for years.

On top of that, House Speaker Paul Ryan's proposal to tax U.S.companies' domestic sales and imports — while exempting theirexports — has stirred controversy among U.S. businesses, createdconflict among Republicans and has yet to win President DonaldTrump's endorsement.

So even as stock traders welcomed Mnuchin's pledge to enactcomprehensive tax legislation before the end of this year, skepticsquestioned the prospect.

“Clearly they're saying what they'd like to believe is true,”said Jared Bernstein, a senior fellow at the Center on Budget andPolicy Priorities, a progressive policy group in Washington.

“We now know that we must heavily discount their assertions,”said Bernstein, who served as former Vice President Joe Biden'schief economic adviser.

“The lack of agreement on the desired direction for tax reformcasts doubt on whether it can be done this year,” said Alan Viard,a senior scholar at the conservative American Enterprise Institute.“But I suppose end of year is still possible, if they can coalescearound something reasonably soon.”

During a conference Thursday sponsored by the Institute ofInternational Finance, both Mnuchin and Gary Cohn, President DonaldTrump's top economic adviser, raised expectations for significanttax legislation before the end of 2017.

“Just to be clear: We hope this won't take 'til the end of theyear,” Mnuchin said. Of the administration's plan, he said: “We'repretty close to being able to bring forward what is going to bemajor tax reform.”

In February, during a meeting at the White House with U.S.airline executives, Trump said: “We're going to be announcingsomething I would say over the next two or three weeks that will bephenomenal in terms of tax.” That was 10 weeks ago.

Because Republicans in Washington generally agree that tax ratesfor businesses and individuals should be cut, many saw Trump'selection — which gave their party control of Congress and the WhiteHouse — as a sign that their goals were in reach.

They still may be. “You don't need a detailed plan in April tohave legislation passed by the end of the year,” said MartinFeldstein, an economics professor at Harvard University. “They areworking on their ideas.”

Congressional Contact

Both Mnuchin and Cohn said the administration is staying incontact with Congress about its plans. But while the Senate FinanceCommittee has maintained open lines with the White House, it hasn'tyet received final details of a plan, said a Republican committeeaide.

In the Senate, the GOP's majority is thin — the party controlsjust 52 of the chamber's 100 seats. Normal Senate rules impose a60-vote threshold for legislation to escape potential filibustersfrom opponents. Senate Republicans could use a process known asbudget reconciliation, which would allow for passing a tax billwith a simple majority. But under that process, any legislationthat added to the deficit would have to be set to expire after 10years.

Mnuchin said Thursday that administration officials hope any taxlegislation will be bipartisan, “but if it's not, we'll go throughthe reconciliation process.”

Cohn said the administration wants a permanent tax overhaul —especially for businesses. Delivering that will require findingways to pay for cuts in tax rates. Trump campaigned on proposals tocut the corporate tax rate to 15% from 35%, and to cut the topindividual income tax rate to 33% from 39.6%.

While those proposals are in flux — and the rates in Trump'sultimate plan may vary — it's unclear how the administration willpropose to pay for such rate reduction.

Border Battle

Ryan's call for a border-adjusted tax on companies' domesticsales and imports could help with that problem. Independentanalysts have estimated that it would raise more than $1 trillionin new revenue over the coming decade, helping to pay for cuts.

But retailers, carmakers and oil companies that rely on importedgoods have mounted intense opposition to Ryan's border-adjustmentconcept. Trump has yet to make his position on it clear.

“There are certain things we like” about the border-adjustedtax, but “there are certain things we don't,” Mnuchin said. Hecited concern over currency adjustments that underpin the proposal.Proponents of the tax say the U.S. dollar would rise 25% to offsetthe higher price of imported goods.

“If the currency does correct in a much stronger currency, thenthat hurts our exports, if the currency doesn't correct, we haveprice appreciation and inflation particularly in consumer goods,then that's a concern,” he said. “We're working with the House andhaving discussions on the specifics of it.”

Health-Care Disagreement

Another potential hurdle is the 2010 health care law known asObamacare, which imposed new taxes on high earners. Republicans,including Trump, have said that by repealing the law — and itsexpansion of the Medicaid program that provides health coverage tolow-income people — they could scrap several taxes that wouldamount to almost $1 trillion over a decade. That would set theofficial revenue baseline lower, making it easier to achieve arevenue-neutral tax plan.

But the White House and congressional leaders have been unableto agree on a clear strategy for moving forward on healthlegislation. Mnuchin brushed aside the concern Thursday. “ Whetherhealth care gets done or doesn't get done, we're going to get taxreform done,” he said.

That may leave any administration proposals heavily dependent on“dynamic scoring” to achieve revenue neutrality. Under dynamicscoring, a tax plan's revenue effects are considered in the contextof the plan's impact on economic growth and consumer well-being.The process can be controversial — economists disagree on the bestways to predict such effects — but Cohn and Mnuchin both emphasizedthe use of the technique.

“Using dynamic scoring may allow us to get to a permanentsolution” on the tax overhaul, said Cohn, the director of Trump'sNational Economic Council.

Edward Kleinbard, a tax law professor at the University ofSouthern California and a former chief of staff for thecongressional Joint Committee on Taxation, questioned that claim.Kleinbard noted that funding for the federal government is set toexpire on April 28, forcing federal lawmakers “to focus on theconsequences for the federal debt of just cutting taxes, againstthe unsubstantiated promise of higher growth.”

“We already have the second lowest-taxed large economy in theworld; if the growth fairy nonetheless does not dwell among us, whywould unprecedented deficits be an irresistibly hospitableenvironment for her to alight?” he said in an email. “And yes, Italk like that.”

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