House Democratic leader Nancy Pelosi today flatly rejected the Republican suggestion that Democrats give up their quest to raise taxes on millionaires as a way to recoup the cost of a payroll tax cut extension for the middle class.
"If this Congress were a reflection of the will of the American people, we would have an extension of the payroll tax cut for 160 million Americans, and it would be paid for by a surcharge," Pelosi, D-Calif., said. "They know what is right. They know we should do this, because it's good for the economy as well as good for these families. They know that if it has to be paid for, that it should come from a place that does not harm the middle class."
Earlier Thursday, House Speaker John Boehner suggested that the Democrats should give up on a proposed tax hike on millionaires to pay for the 10-month extension of the payroll tax credit.
"They refuse to allow any alternatives at all except for a job-killing small-business tax hike that they know can't pass the Senate, much less pass the House," Boehner said. "Right now, the only ones blocking an agreement are Senate Democrats and the president. It's time for them to act."
A new ABC News/Washington Post poll shows that 72 percent of Americans support increasing tax rates for individuals earning more than $1 million a year. Pelosi reasoned that if the cost of the payroll tax credit extension had to be recovered, a tax hike for millionaires was better than making spending cuts to programs intended to help the middle class.
"The American people are very wise," Pelosi said. "We didn't pay for tax cuts for the wealthy, again, why should we pay for them for the middle class? But if they have to be paid for, 72 percent of the American people have the wisdom to know something has intervened between the wisdom of the American people and the decision of the Republicans in Congress."
"We are here to represent the people, to be a reflection of their values and their priorities," she said. "They want a tax cut, and they want it paid for by a surcharge."
Asked about the GOP's aversion to tax hikes, Rep. Chris Van Hollen, one of the Democratic conferees tasked with reaching a compromise on the extensions, pointed to "a fundamental inconsistency in the position the Republicans have."
"They have a double standard. The first thing they did when they became the majority party in the House of Representatives was to pass a rule saying that when it comes to providing tax cuts for millionaires and the wealthiest, you don't have to pay for them," Van Hollen, D-Md., said. "Now they're saying when it comes to a temporary, 10-month extension of a payroll tax cut that benefits not the very wealthy but … 160 million working Americans, that we have to offset by making cuts in other areas that are going to hurt the middle class."
Democrats prefer not to pay for the extension of unemployment insurance because they consider it emergency funding, and they would like to use savings from winding down the wars in Iraq and Afghanistan to pay for the "doc fix" element of the package. Van Hollen, the top Democrat on the budget committee, indicated he would be open to additional "pay-fors" beyond the tax increase on millionaires, such as an end to subsidies for the oil and gas industries.
As he spoke about all of the Republicans who are on the public record as opposing the payroll tax cut, Rep. Steve Israel, D-N.Y., the chairman of the Democratic Congressional Campaign Committee tasked with leading the Democrats' drive to regain the House majority, imagined how the brinksmanship over the payroll tax cut would play out in the November election.
"They are so out of touch and so disconnected, there is an intuitive sense in this country that the only thing about the middle-class tax cut that House Republicans don't like is the middle class - the first time in the history of Republicans that they have become frugal when it comes to tax cuts that they have found one condition after another, one exchange after another, to hold up this tax cut for the middle class," Israel said. "We're doing everything we can to move this process forward. We'd like a little reciprocity."
The conference committee, made up of 20 lawmakers appointed by the leaders of both parties in both chambers of Congress, has met publicly four times.
Rep. Dave Camp, the top Republican involved the talks, has not announced when the next meeting will take place, although small groups of conferees continue to discuss an array of options to beat the Feb. 29 deadline.
Members from both sides say they hope the committee reports to Congress by next Friday, Feb. 17., before Congress goes home for a week-long President's Day holiday recess.