Nancy Pelosi Defends Reframing Middle Class As People Making Up To $1 Million

Nancy Pelosi Defends Reframing Middle Class As People Making Up To $1 Million

WASHINGTON -- House Minority Leader Nancy Pelosi (D-Calif.) on Thursday defended her push to permanently extend "middle class" tax cuts to people making up to $1 million, saying that drawing the line at $250,000 hasn't worked.

Pelosi has come under fire since she pressed House Speaker John Boehner (R-Ohio) last week to hold a vote to extend "middle class" Bush tax cuts. The Washington Post ripped her "interesting definition" of the middle class and said her proposal would actually benefit millionaires since they would end up paying lower marginal rates on their first $1 million of income. The left-leaning Center on Budget and Policy Priorities (CBPP) followed suit, warning Wednesday that lawmakers would have to come up with another $366 billion to pay for the revenue lost under Pelosi's plan.

During her weekly briefing, Pelosi took aim at her critics and said that her proposal is the best way forward if people want to see any kind of permanent middle class tax cut extension in Congress.

"I've been pushing for middle class income tax cuts for a long time, A. B, the [$250,000 threshold] never made it. Three, if we can get the $1 million and above people to pay their fair share, we get a lot of money," Pelosi said. "Eighty-one percent of the benefits of the Bush tax cuts [for people making more than $250,000] go to the people making over $1 million a year ... If that's easier for the public to understand, then we should go that route."

Pelosi said it's not a problem that she and President Barack Obama are on different pages on the issue. Obama only supports extending the cuts for people who earn less than $250,000. By contrast, Republicans want to extend all of the cuts, even for millionaires, which are set to expire at the end of the year.

"I think they're where they have to be and we're where we have to be," she said of the White House, after the briefing. "And that's not about defining who is a middle-income person, it's about getting something done. This has played into the hands of the wealthiest people in our country because we've gotten nothing done. You see?"

White House Press Secretary Jay Carney dodged questions Thursday on what Obama thinks about Pelosi's proposal. He reiterated that the president is committed to tax cuts for those making less than $250,000.

"We need to end the tax breaks for the wealthiest Americans and make them permanent for every family bringing in less than $250,000 a year," he said at his daily briefing. "We know that Democratic leaders in Congress are committed to making sure that taxes do not go up on millions of families at the end of the year, as is the president."

Asked about CBPP's concerns that her proposal would add hundreds of billions to the deficit, Pelosi said that was not accurate.

"I don't agree with their calculation," she said, citing the need for new revenues and spending cuts as the solution to deficit reduction. "If the inference to be drawn from their calculation is therefore we have to make other cuts, I don't agree with that. The tax rate on income is one way to approach upper income revenue. There are other ways as well."

She also dismissed CBBP's claim that her plan would put pressure on Congress to make steeper cuts to government programs. "I don't know where they got their information ... I highly regard them, but I have a different view of how this goes."

The bottom line, Pelosi said, is that Democrats need to put some kind of tax cut plan on the table that has a chance of moving forward.

"When we're in that debate, we can go any place with that. Clinton tax cuts. 250. Whatever it is. But let's get it started," she said. "It's a path to getting something done. It's a path to reducing the deficit while we get the wealthiest to pay their fair share. It's a path to take us to tax simplification. Let's put it all on that table at that point and see what we do with the rest of it. But year in and year out, getting nothing accomplished except the extension of the tax cuts, I think that has done more to demand cuts in a domestic agenda than what I'm talking about."

One thing that Pelosi said is not an option? Another short-term extension of the Bush tax cuts.

"I think that's fairly stupid," Pelosi said. "That's not about instilling confidence ... We're talking about kicking that old can down the road."

In the meantime, Boehner doesn't appear willing to budge on his stance that all of the tax cuts should be extended.

"I believe that raising taxes at this point of our recovery is a big mistake," Boehner told reporters earlier Thursday.

“Even under Ms. Pelosi's argument, half of those who would get this higher tax are small business people that are sub-chapter S or other types of pass-through entities," he said. "At a time when we’re trying to help small businesses create jobs, this proposal would kill jobs."

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