House Speaker Nancy Pelosi has been given a charge from the chamber’s Democratic caucus to negotiate a better tax deal than President Obama got from Senate Republicans.
And Pelosi says she will do just that.
But what’s her "ask"? What’s her credible—and doable—demand?
Pelosi should pull no punches. But, If we assume she cannot get the Republicans or Obama to abandon the absurdly uneven trade-off that defines the deal—a two-year extension of tax cuts for billionaires in return for a one-year extension of basic benefits for the unemployed—then she has to look elsewhere.
For plenty of practical and political reasons, Pelosi can and should start the pushback by focusing on the side deal to renew the estate tax with broad exemptions for millionaires—up to $5 milion for individuals, up to $10 million for couples—and a top rate of 35 percent for the coming two years.
Pelosi has already pointed to the estate-tax agreement as a bone of contention for House Democrats.
“We believe the estate tax in the bill is a bridge too far,” the Speaker has said.
Her closest ally in the Congress, House Education and Labor Committee chair George Miller, D-California, is even blunter: "The estate tax [bargain] is just gratuitous."
Pelosi and Miller won’t have any problem making that argument to their caucus, which was blindsided when the White House announced it had not just embraced but actually inflated the estate-tax exemption Republicans had been proposing.
Nor should they have much problem making the case to the great mass of Americans.
This really is a giveaway to millionaires. Indeed, as the group United for a Fair Economy notes, "The deal [Obama accepted] would make the estate tax even weaker than it was under President Bush, and the weakest it has been in seven decades."
The scheme to exempt the first $5 million of an individual’s estate, and the first $10 million of a couple’s estate, and only tax amounts above those exemptions at 35 percent is, according to OMB Watch "a proposal that conservative pundits and politicians have been pushing for years because they know it will essentially eviscerate the estate tax."
"Originally," the watchdog group notes, "President Obama had been calling for extending 2009 estate tax levels as a compromise on the issue. An extension of the 2009 estate tax would exempt the first $3.5 million ($7 million for couples) of an estate’s value and tax any amount above that at a rate of 45 percent. This proposal was more than generous to the wealthy of this nation, as it would affect less than one percent of estates each year."
OMB Watch has got a few more arguments for Pelosi to make: