Domestic Taxes

House Dems try to force vote on extending middle-class tax rates

House Minority Leader Nancy Pelosi (D-Calif.) on Friday announced Democrats would circulate a discharge petition to force a House vote to extend current tax rates only on annual household income below $250,000.

The Senate has already approved the extension, but Republicans are objecting because they want all of the Bush-era rates to be extended, including on income above $250,000. 

{mosads}The move by Pelosi comes as President Obama has sought to increase public pressure on Republicans to bend on the issue.

Obama and Congress are struggling to reach a deal on taxes and spending that would prevent the tax hikes as well as $1.2 trillion in automatic spending cuts set to begin in January. Economists warn the combination of increased taxes and spending cuts could throw the economy into a recession.

Republicans argue too much focus is on tax rates and not enough attention is being paid to cutting spending and reforming entitlements that they say are the main drivers of the deficit. Speaker John Boehner (R-Ohio) and other Republican leaders criticized a White House proposal this week that included $1.6 trillion in new taxes and $400 billion in spending cuts. 

Pelosi’s discharge-petition gambit seems unlikely to succeed, even though a few House Republicans — most notably Rep. Tom Cole (R-Okla.) — have offered support for extending the middle-class rates alone.

Democrats would need the support of more than 20 Republicans to secure the 218 signatures needed to force the bill to the floor.

“We’re calling upon the Republican leadership in the House to bring this legislation to the floor next week,” Pelosi said Friday during a press briefing in the Capitol. “We believe that not doing that would be holding middle-income tax cuts hostage to tax cuts for the rich — tax cuts for the rich which do not create jobs, just increase the deficit, heaping mountains of debt on future generations.

“So to that end — if there’s no announcement of scheduling of the middle-income tax cut,” she added, “then on Tuesday we will be introducing a discharge petition.”

The debate over how — or whether — to extend the Bush-enacted income tax cuts has broiled since late 2010, when the president and GOP leaders reached a deal to keep the lower rates in place for all incomes through 2012.

Republicans reject the idea of extending the Bush-era tax rates only on annual incomes below $250,000, insisting instead that the lower rates remain in place for all income levels.

“Raising tax rates — asking Americans, small businesses, to pay more of their money into Washington, when Washington cannot seem to get a handle on its spending problem — will just make matters worse,” Majority Leader Eric Cantor (R-Va.) said Friday in refusing to consider the Senate bill. “We’ve got to stop the spending madness.”

The issue has emerged as the central sticking point in the “fiscal cliff” talks, with neither side ceding any ground to the other.

Democrats argue that Obama’s reelection victory is an indication that voters support the president’s approach.

“Elections have consequences,” Pelosi said Friday.

Republicans have countered that their continued control of the House is indication that Obama has no license to raise tax rates.

“The American people want solutions — and tonight, they’ve responded by renewing our House Republican majority,” Boehner said on election night. “With this vote, the American people have also made clear that there is no mandate for raising tax rates.”

Speaking at a Pennsylvania manufacturing plant on Friday, Obama sought to put public pressure on Republicans. 

“This is not some run-of-the-mill debate,” Obama said from the stump at a toy company in Hatfield, Pa. “We’ve got important decisions to make that are going to have a real impact.

“If Congress does nothing,” he warned, “every family in America will see their taxes go up on January 1st.”

It’s hardly the first time this year the House has confronted the issue. In August, the lower chamber approved legislation extending the lower rates across the board, with 19 Democrats breaking with their party to support it. A Democratic amendment to limit the tax break to incomes below $250,000 — the same bill Pelosi is hoping to bring up by discharge petition — failed 170-257, with 19 Democrats voting against it.

Pelosi on Friday conceded that no Republicans have agreed to endorse the discharge petition. But that concern was secondary to the political message the Democrats are hoping to send.

“The clock is ticking, the year is ending,” Pelosi said. “It’s really important with tax legislation for it to happen now.”

Tags Boehner Eric Cantor John Boehner
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