Pelosi asks Boehner for immediate vote on middle-class tax cuts

Rep. Nancy Pelosi (D-Calif.) on Wednesday urged Republicans to stage an immediate vote on extending the Bush-era tax rates for the middle class and making those rates permanent. 

In a letter to Speaker John Boehner (R-Ohio), the House Democratic leader said the issue should be resolved "as early as next week" both to lend confidence to consumers and to ensure the issue isn't lost amid the chaos that's expected to mark this year's lame-duck session.

"Extension of this middle-income tax cut will inject demand into our markets and strengthen small businesses," Pelosi wrote. "We cannot afford another manufactured crisis that unnecessarily threatens the full faith and credit of the United States and jeopardizes our economic recovery."

President Obama and Republican leaders agreed in December 2010 to extend the Bush-era tax rates for all taxpayers, meaning the cuts will expire in January without congressional action.  

Boehner has said he'll bring a vote on extending all of the tax rates before November's elections.

"Speaker Boehner has already announced that the House will act to stop the tax hike on every American taxpayer," Boehner spokesman Michael Steel said in response to Pelosi's letter.

 Republicans want to extend the Bush tax rates for all taxpayers. Democrats want to extend the tax cuts for those earning less than $1 million per year, but allow the cuts for wealthier folks to expire to pay down the deficit — a notion Pelosi drove home in her letter to Boehner.

"We must ask the very wealthiest Americans to pay their fair share," she wrote. "It is unacceptable to hold tax cuts for the middle class hostage to extending multi-billion dollar tax breaks for millionaires, Big Oil, special interests and corporations that ship jobs overseas."

President Obama has yet to embrace the $1 million threshold on the tax issue. His argument going back to his 2008 campaign is that the Bush tax rates should expire on individuals with annual income above $200,000 and families with annual income above $250,000. He has also vowed to not agree to extend the rates for wealthier households again.

Republicans, for their part, are opposed to any tax hikes, and focus instead on spending cuts to reduce deficits. For that reason alone, Boehner is highly unlikely to separate the Bush tax cut extensions by income level.

If the extension is not resolved before the election, it will be pushed into a lame-duck session that's already bursting with issues Congress will have to tackle – including the expiration of the payroll tax holiday, the end of a Medicare pay hike for doctors and a debt ceiling that will need raising.

Boehner last week surprised Washington by vowing to oppose any debt-limit hike without spending cuts of at least the same size. The threat all but guarantees another tense, partisan showdown over federal spending – a debate that's sure to include the Bush-era tax cuts.