President Obama's tax reform commission may be folded into the fiscal commission review, said Peter Orszag, director of the Office of Management and Budget (OMB) at a budget briefing on February 1.

President Obama's tax reform commission may be folded into the fiscal commission review, said Peter Orszag, director of the Office of Management and Budget (OMB) at a budget briefing on February 1.

The fiscal commission is a bipartisan panel that the president created to make recommendations for reducing the deficit. Beyond that broad goal, its mandate remains unclear.

The administration is still sticking to the line that the tax commission will produce its findings on how to improve and simplify corporate tax. "The tax reform panel's report will be issued and sent to the president," said Kenneth Baer, a spokesman for the OMB. "It is also very likely that the report will be of interest to the fiscal commission, and that it would be sent there as well for consideration."

The White House created the tax commission in March 2009, with a mandate to recommend measures to overhaul the tax code. Specifically, the commission was charged with examining corporate tax reform, including closing loopholes, and enhancing compliance and enforcement. Paul Volcker, who chairs the president's economic recovery advisory board (PERAB), heads the commission.

"The hope with the tax panel was that it would focus on reforming the tax system and make it more efficient for collecting revenue," said Robert Carroll, a senior fellow at the Tax Foundation.

The commission was supposed to issue its first report by December 4 last year, but at the end of 2009 the administration announced that the report would not come out until "after the holidays".

"Subsuming the tax panel into a broader commission definitely changes the character of the work," said Carroll. "The mission changes from reform aimed at collecting revenue in the most efficient way to a focus on raising more revenue for the growing deficit that is caused by an increase in spending related to the financial crisis and economic downturn."

Some policy specialists do not expect that this will affect the administration's drive to accomplish certain tax reform goals. "The topic of tax reform will still be there," said Dan Mitchell, senior fellow at the Cato Institute, a right-wing think tank. "There is no question that this administration wants a VAT. The good thing about commissions is that you can simultaneously push a plan and have deniability."

"I would be surprised if there were quick action on this because Democrats are already in trouble for mid-term elections," said Mitchell.