House speaker, Treasury secretary vow to overhaul US tax code in 2017
House Speaker Paul Ryan (Photo: screen capture)

Two main actors in the Republican tax reform debate vowed on Tuesday to complete an overhaul of the federal tax code in 2017, despite party infighting and political distractions from alleged Russian meddling in the 2016 election.

In a speech to U.S. manufacturers that was released by his office, House of Representatives Speaker Paul Ryan said President Donald Trump and the Republican-controlled Congress cannot afford to let the opportunity for tax reform slip this year.

"We are going to get this done in 2017. We need to get this done in 2017," Ryan said in the speech to be delivered Tuesday afternoon to the National Association of Manufacturers, a powerful Washington lobby group.

"Transformational tax reform can be done, and we are moving forward. Full speed ahead," he added.

The Trump administration and congressional Republicans face mounting pressure from U.S. businesses and voters to succeed on tax reform, a top 2016 campaign pledge that could determine whether Republicans retain control of Congress in the 2018 midterm elections.

It was not clear whether Republicans can overcome infighting over healthcare legislation and government spending to move forward on tax reform.

Treasury Secretary Steven Mnuchin echoed Ryan's remarks on CNBC television, saying: "The focus is lower rates. What comes with that is reform, which is broadening the base, making sure that we cut lots of special interest deductions, simplifying the tax code."

Ryan and Mnuchin are among six officials trying to agree on tax reform in closed-door discussions aimed at producing legislation in September. The others are Senate Republican leader Mitch McConnell, White House economic adviser Gary Cohn and the Republican chairmen of two tax committees.

Major stock indexes hit multiple record highs from Trump's November election to the end of the first quarter, on bets that he would improve economic growth by cutting taxes and boosting infrastructure spending.

The discussions appeared to have achieved little of substance so far, according to lobbyists, aside from broad agreement on concepts including the need for a "territorial" system that would no longer tax the foreign profits of U.S. corporations.

In his speech, Ryan is expected to emphasize the importance of permanent reforms, reject the notion that legislation should do little more than reduce tax rates and make a case for mechanisms to prevent U.S. corporations from moving income, assets and jobs overseas.

(Reporting by David Morgan; Editing by Leslie Adler and Jeffrey Benkoe)