Expect permanent revenue-neutral tax reform by summer, Sen. Rob Portman says

Sen. Portman: Tax reform depends on timing

Taxpayers should expect to see revenue-neutral tax reform as early as this summer, Republican Sen. Rob Portman told CNBC on Wednesday.

"We need to do it. It's urgent. It's one way we know we can give the economy a shot in the arm," the Ohio senator told "Squawk Box."

Portman said congressional Republicans are already working to change the "inefficient," "antiquated" tax code by April or May, when Congress typically puts together a budget resolution.

He said tax-reform proponents will use budget reconciliation to push through the revamp. The process allows for faster consideration of certain legislation dealing with taxes, spending and debt.

Budget reconciliation also protects bills from Senate filibuster and allows them to pass with a simple majority instead of 60 votes.

"I think that'll probably be necessary, honestly, to get the kind of tax reform done that we're looking at: pro-growth, pro-jobs tax reform," Portman said.

He said the ultimate goal for Republicans besides passing the tax reform is making it revenue neutral, meaning no increase or decrease in federal tax revenues.

Critics of revenue-neutral tax reform say the plan creates winners and losers in the tax system by lowering taxes for some and raising them disproportionately for others. They also say it can hinder the country's spending plans, which are seen as critical in areas like education.

To prove that the reform will eventually start to generate revenue, the senator said Republicans will use a process called dynamic scoring, which predicts and accounts for the economic effects of reform.

Static scoring assumes no changes to economic activity and analyzes proposed changes as is.

Portman argued that the $2.5 trillion companies are holding in cash overseas is more likely to be repatriated if the tax rate is lowered, and that would generate revenue.

"I think it should be revenue neutral because that way it can be so-called permanent tax reform, not subject to the limitations of the budget, which is what otherwise would happen," Portman said. "But we should use the kind of scoring that actually shows the dynamic nature of good tax reform."