LinkHouse Speaker Nancy Pelosi (D-Calif.) is urging the incoming Obama administration to stick to its campaign pledge and immediately increase taxes on the wealthiest Americans, a position that President-elect Barack Obama has wavered on since winning election.
Pelosi told reporters today that she "couldn't be more clear" in opposing some Obama advisers' wish to wait for the tax cuts on the highest income earners to expire in two years, as they are set to do under current law. "Put me down as clearly as you possibly can as one who wants to have those tax cuts for the wealthiest in America repealed," she said.
Pelosi said the income tax cuts to the highest earning Americans -- which were decreased from 39.6 to 35 percent as part of the 2001 Bush tax plan -- have been "the biggest contributor to the budget deficit," which now stands at $1.2 trillion for fiscal year 2009. That deficit figure does not include the impact of the pending stimulus measure, which will cost around $800 billion, nor does it include estimates for supplemental spending bills that will come later this year to finance the wars in Iraq and Afghanistan.
On the campaign trail, Obama touted an immediate repeal of the Bush tax cuts for top wage earners, while promising tax relief for the bottom 95 percent of Americans. He said he planned to use increased revenues from the repeal of those tax cuts to finance some of his ambitious agenda items, including a near-universal health care plan.
As the economic situation has grown more dire, however, Obama's advisers have hinted in recent weeks that they may wait two years and allow the tax cuts for the wealthy to expire, fearful of the impact of raising taxes during a sharp recession. And in an interview with CNBC Wednesday night, Obama himself said he had not yet decided what he would do.
"I'm not prepared to make a hard and fast commitment.... What I've said is that I'm less concerned about whether it happens this year or next year. More concerned with the basic principle that we've got to restore balance and fairness to the tax system," Obama said.
With no public decision made, Pelosi decided to step up the public pressure, suggesting the revenue raised from increased taxes on those making more than $250,000 could be used for a host of programs and deficit reduction.
"The opportunity calls for us in this country to invest in our children and their health and their education, and all of the -- to reduce the deficit, to reduce the deficit if we had those resources," she said.
Pelosi said the Bush tax cuts for the wealthy "have not grown the economy, have not contributed to the our economic security."
"I couldn't be more clear: Put me down as one in favor for repeal as soon as possible," she said.
But Sen. Richard Durbin, the No. 2 Democrat in the Senate, put the chances for repeal at practically nil, especially given Obama's expressed reservations. "The president-elect believes this may not be the moment," Durbin said, referring to the economic crisis. "I agree with her in principal," he added, "but I disagree with her on timing."
First instinct: Dems are rebelling now that the Prez is a dem and their balls are no longer retracted.WASHINGTON – President-elect Barack Obama's proposed tax cuts ran into opposition Thursday from senators in his own party who said they wouldn't do much to stimulate the economy or create jobs. Senators from both parties agreed that Congress should do something to stimulate the economy. But Democratic senators emerging from a private meeting of the Senate Finance Committee criticized business and individual tax cuts in Obama's stimulus plan.
They were especially critical of a proposed $3,000 tax credit for companies that hire or retrain workers.
"If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," said Sen. Kent Conrad, D-N.D., a member of the committee.
"That to me is just misdirected," Conrad said.
Sen John Kerry, D-Mass., said, "I'd rather spend the money on the infrastructure, on direct investment, on energy conversion, on other kinds of things that much more directly, much more rapidly and much more certainly create a real job."
The cost of the economic rescue package Obama wants is expected to swell to $800 billion or more. About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.
One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 to $20 larger each week.
Sen. Ron Wyden, D-Ore., said he doubted that a modest tax cut would change consumers' spending habits.
"In tough times people don't respond all that well to marginal changes, such as a small amount of money added per paycheck," Wyden said.
Democratic Sen. Max Baucus of Montana, chairman of the Finance Committee, said he hopes to schedule a committee vote on the stimulus package in about two weeks, which would coincide with the week of Obama's inauguration. Many senators still hope to approve a package by mid-February.
There is "general agreement that because of the recession we've got to move, we've got to move quickly, very quickly," Baucus said.
He added that it is too early to pass judgment on any aspect of Obama's plan.
"This is an early part of this whole process. A lot of preliminary questions are going to be asked," Baucus said.
Second thought: Hrm. Obama introduces two changes that quiet down the GOP and keep things in the news quieter, and the Dems insist on changes to remove them. If I'm right, the next move is some failed talks, some media reports of consternation, and the majority in the Congress calls this one.
And Obama comes off as post-partisan.
That's the kind of crazy-clever I expect from Chicago, not Blago.