Democratic leader Rep. Nancy Pelosi, D-Calif., in the midst of fending off a coup to derail her return to the House speakership, is proposing a series of rules changes that could kneecap liberals from pursuing a bold agenda in the new Congress.
Among the many proposed rules changes the incoming majority plans to make in a draft document obtained by the Washington Post, is one backed by Pelosi and Rep. Richard Neal, D-Mass., ranking member of the House Ways and Means Committee, that would “[r]equire a three-fifths supermajority to raise individual income taxes on the lowest-earning 80% of taxpayers.”
The proposed changes also hint at restoring some sort of “reasonable rule” aimed at making sure legislation is paid for, though there isn’t much elaboration.
Liberals are already raising alarms about the proposal, and from their perspective, this is understandable.
The reality is that liberals have sweeping legislative ambitions aimed at transforming America, including free healthcare, free college, free child care, a federal job guarantee, paid leave, and so on. All of these proposals would cost an extraordinary amount of money, and there is simply no way to get them going without broad-based middle-class tax hikes, deficit spending, or some combination of the two. Requiring a three-fifths majority on tax increases on those earning less than 80 percent would effectively eliminate the ability to raise the kind of revenue needed to even make a semblance of an argument that new legislation is “reasonably” paid for.
Just as an example, in 2016, the liberal Urban Institute determined that Sen. Bernie Sanders’, I-Vt., plan for “free” healthcare would add $ 32 trillion to federal spending. A Tax Policy Center analysis of his tax proposals aimed at paying for healthcare and other priorities found that they would raise taxes on every single income group. Those in the 61 percent to 80 percent range would face average increases of over $ 9,000 in the first year. The House rules changes would effectively take that revenue off of the table.
Now, I suppose Democrats technically would have some wiggle room if the new rule were adopted. Because the proposed rule specifies “income taxes” it leaves an opening to raise money in other ways — payroll taxes, VAT taxes, and so on. But politically, that’s really a nonstarter. If Democrats make the 80 percent pledge and end up raising taxes on the middle class, Republicans will be able to effectively campaign against it as a broken promise, and any Democratic candidate trying to claim, “Well, we said income tax, but not payroll tax,” will be scorched.
I mean, I didn’t expect Pelosi to suddenly go full speed ahead with the Sanders agenda, but I also wouldn’t have predicted that she would have cut liberals down right out of the gate.