‘A Staggeringly Bad Idea’: Outrage as Pelosi Pushes Tax Rule to ‘Kneecap the Progressive Agenda’

For First Act in Power, Democrats Consider Making Their Own Agenda Impossible to Pass

by  Intelligencer Nov 16, 2018

This week, Minority Leader Nancy Pelosi unveiled a list of new procedural rules that her caucus intends to implement when the next Congress is seated. Most of these measures are unobjectionable “good government” reforms. But one of them would create a new — and all-but-insurmountable — obstacle to the passage of many of the policies that the Democratic Party claims to support.

The rule, proposed by Pelosi and Massachusetts representative Richard Neal, would “require a three-fifths supermajority to raise individual income taxes on the lowest-earning 80 percent of taxpayers.”

This proposal is, in effect, a progressive revision of an existing House rule: Under Paul Ryan’s leadership, the current Republican majority established a supermajority requirement to raise income taxes on anyone. Thus, Pelosi’s decision to retain the supermajority threshold on tax hikes – but restrict it to the bottom 80 percent – might look commendable on first glance. After all, in recent decades, America’s richest citizens have seen their tax rates plummet, even as their share of income gains soared – so why not take measures to restrict future tax increases to the top 20 percent of earners? A spokesman for the minority leader’s office, Henry Connelly, describes the proposal as a populist measure, aimed at repealing “a Republican rule rigged to permanently lock in the massive tax giveaways…[to] wealthiest 1 percent and big corporations,” while “affirming Democrats’ commitment to protect hard-working Americans.”

Alas, there are several problems with this argument. For one thing, while progressives are committed to increasing the discretionary income of the bottom 80 percent, that does not necessarily mean keeping their tax rates frozen at historically low levels. Currently, for much of the American middle class, health-insurance premiums function as a steadily rising tax. A bill that required those households to pay a new, smaller monthly sum to the government — so as to fund a single-payer system that would actually reduce their cost of living by delivering radically cheaper health-care services — could hardly be called regressive. And the same can be said for legislation establishing universal child care, paid family leave, or any other program aimed at easing the middle class’s financial burdens by dramatically expanding the public sector’s ambitions. Equating support for middle-class families — with opposition to increasing their tax rates — is a conservative project, which Democrats have no business advancing. If the party wishes to establish structural barriers to policies that would hurt the middle class, why not require a three-fifths majority to cut Medicaid, Medicare, or Social Security?

To be sure, in the present context, with Mitch McConnell leading the Senate and Donald Trump in the White House, the supermajority requirement is of no real consequence. The Republican Party is not going to sign off on middle-class tax hikes — or at least not to finance new social spending. Once procedural rules are established, however, they can be difficult to eliminate.

There are plenty of Democrats in the House who don’t want to be forced to chose (publicly) between voting for higher taxes on the middle class and against a priority of the progressive base. Such lawmakers are sure to value (and thus, insist on the preservation of) a procedural obstacle that allows them to forgo voting on legislation that forces them to make such hard choices by rendering such bills impossible to pass without GOP buy-in (which is to say, impossible to pass).

All this would be a bit less problematic if the Democratic Party had overcome its allergy to deficit spending (and/or accepted Modern Monetary Theory as its personal truth). But it hasn’t: In addition to forbidding tax increases on the bottom 80 percent, Pelosi has vowed to honor the “pay as you go” rule, which requires the House to fully finance any and all new government spending.

Taken together, these two requirements could make Medicare for All impossible to pass out of the House. It is true that the supermajority rule is specifically worded to bar increases in individual income taxes, as opposed to payroll taxes (the primary funding mechanism for Bernie Sanders’s single-payer bill). But it seems unlikely that this distinction will be honored in practice: As a political matter, it will be difficult to insist that a rule titled “Protect the Middle Class From Tax Increases” does not apply to payroll-tax hikes, given that such hikes increase taxes on the middle class. And if the distinction between income and payroll taxes doesn’t stick, then the super-majority rule would render a whole host of Democratic policies nonviable.

For example, Kirsten Gillibrand’s FAMILY Act finances an expansion of paid family and medical leave with a 0.4 percent increase in the payroll tax (split between employees and employers). Her law would make life much easier for many caretakers in the bottom 80 percent, while increasing their tax bills by a near-indiscernible amount. And yet, in the name of helping the middle class, the new Democratic House majority wants to give their Republican colleagues the power to veto such legislation.

Although Pelosi officially proposed retaining the GOP’s supermajority rule, in restricted form, it is unclear whether the idea originated with her. At present, a group of House Democrats from the caucus’s moderate wing is pushing to oust Pelosi from leadership. Generally speaking, those leading the charge to deny Pelosi the speakership have made opposition to tax hikes a far more prominent part of their political brands than she ever has. And according to the Washington Post, many of the rule changes endorsed by Pelosi had been “ demanded by some members in return for their speaker votes.” Thus, it is neither clear that Pelosi is the driving force behind the supermajority rule, nor that denying her the speakership would prevent its implementation.

After all, there are other forces that could be pulling the caucus in a more conservative direction: Republican gerrymandering proved insufficient for preventing Democrats from winning back the House — but, by systematically underrepresenting liberal constituencies, it did manage to ensure that the new Democratic majority would be unusually beholden to swing (and/or right-leaning) voters. Katie Porter, an Elizabeth Warren acolyte, did just win election in a historically Republican district in California’s Orange County— but she ultimately felt that she needed to air ads like this in order to do so.

Regardless, the supermajority requirement’s origin matters less than its defeat. Between now and January, the progressive forces within Team Blue’s tent must work to nip this rule in the bud. When voters went to the polls earlier this month, 123 House Democrats, and many of the party’s House candidates, had pledged to support Medicare for All. If the new Democratic majority decides to make that goal more difficult to achieve — as its first act upon taking office — then it will recklessly betray many of the people whose votes, dollars, phone calls, and door-knocking put them into power.

 

“This is a very bad idea, House Democrats. It makes no sense whatsoever to give Republicans veto power over progressive legislation.”

by Jake Johnson Common Dreams Nov 16, 2018

Nearly three-quarters of the American public and a historic number of Democratic lawmakers support Medicare for All, but the House Democratic leadership is considering using its newly won majority to impose a rule that would “recklessly betray” the grassroots forces that put them in power by making single-payer and other progressive priorities impossible to enact.

“Equating support for middle-class families—with opposition to increasing their tax rates—is a conservative project, which Democrats have no business advancing.”
—Eric Levitz, New York Magazine

According to a list of Democratic proposals obtainedby the Washington Post, House Minority Leader Nancy Pelosi (D-Calif.)—who is currently fighting back against efforts to prevent her from becoming House Speaker—is pushing for a rule that would “require a three-fifths supermajority to raise individual income taxes on the lowest-earning 80 percent of taxpayers.”

In response, MoveOn.org called the proposal “a staggeringly bad idea.”

Though the proposed rule is framed as an effort to protect the financial well-being of middle class Americans, Eric Levitz of New York Magazine pointed out that “while progressives are committed to increasing the discretionary income of the bottom 80 percent, that does not necessarily mean keeping their tax rates frozen at historically low levels.”

“A bill that required those households to pay a new, smaller monthly sum to the government—so as to fund a single-payer system that would actually reduce their cost of living by delivering radically cheaper healthcare services—could hardly be called regressive,” Levitz notes. “And the same can be said for legislation establishing universal child care, paid family leave, or any other program aimed at easing the middle class’s financial burdens.”

“Equating support for middle-class families—with opposition to increasing their tax rates—is a conservative project, which Democrats have no business advancing,” Levitz added. “If the party wishes to establish structural barriers to policies that would hurt the middle class, why not require a three-fifths majority to cut Medicaid, Medicare, or Social Security?”

Combined with Pelosi’s expressed committment to reviving the “economically illiterate” pay-go rule—which would require that all new spending be offset by spending cuts or tax hikes—the proposed tax restriction would completely undercut Medicare for All, free public college, a federal jobs program, and other ambitious left-wing policies by dramatically restricting the party’s ability to raise revenue and effectively handing Republicans the power to block progressive legislation.

“It would be a profound mistake for House Democrats to retake Congress with dozens of candidates who ran on Medicare for All and then pass an absurd, right-wing framed rule that would actively prevent us from taking action on it.”
—Democracy for America

“This is disastrous policy and messaging,” argued Richard Phillips, senior tax policy analyst for the Institute on Taxation and Economic Policy (ITEP).

The proposed rule, Phillips added, would constrain “revenue that can be generated for many of the kind of bold investments we need to be making in terms of healthcare, education, infrastructure, etc.”

Progressive advocacy groups and experts registered their outrage at Pelosi’s rule proposal on social media on Friday, with economist Stephanie Kelton warning that the Democratic leader’s measure would completely “kneecap the progressive agenda.”

 

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2 thoughts on “‘A Staggeringly Bad Idea’: Outrage as Pelosi Pushes Tax Rule to ‘Kneecap the Progressive Agenda’

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