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Monday, November 15, 2010

Liberal Democrats urge Pelosi to stand firm in debate over tax cuts

By Mike Lillis - 11/15/10 11:54 AM ET

House liberals are urging Democratic leaders to let the George W. Bush-era tax cuts on the country's highest earners expire.
Reps. Raúl Grijalva (Ariz.) and Lynn Woolsey (Calif.), co-chairs of the Congressional Progressive Caucus, said extending the tax breaks for those earning more than $250,000 a year represents "a giveaway" to wealthy Americans that would saddle the country in unnecessary debt.
"This debt, in turn, will be paid by the lower and middle classes through increased interest payments and decreased social services for generations to come," the lawmakers warned in a Monday letter to Speaker Nancy Pelosi (D-Calif.).
"This astronomical sum could instead be used to close our budget deficit. It is critical that we pass President Obama’ s middle-class tax proposal without providing an even greater lift for the wealthiest Americans who don’t need it."
With the start of the lame-duck session, Democrats find themselves at a crossroads. Though the party was trounced in midterm elections that delivered the House majority back to the GOP, its leadership team is poised to remain unchanged — a signal that Democrats intend to defend their legislative agenda rather than conceding ground to more conservative members.
Indeed, Pelosi last week said she has no plan to extend the Bush tax cuts to high-dollar earners.
"The position that we have, and which is the position the president has put forth, is that everybody should get a tax cut in our country," Pelosi told NPR on Friday. "The problem comes when an additional tax cut to the wealthy … will heap $700 billion [onto the] debt."

The $700 billion is a reference to the difference in cost between the two party's plans for extending the cuts. Most Democrats want to extend the breaks to families earning below $250,000 each year (or $200,000 for individuals), while Republicans want to extend the cuts for everyone.
The Democrats' plan costs roughly $3 trillion over the next decade, while the GOP proposal would cost $3.7 trillion. Though the country will have to borrow to plug the loss in revenue, neither party is proposing to offset their measures.
The tax cuts expire at the end of the year.

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