House Minority Leader Nancy Pelosi, D-Calif., said she will not sign off on any fiscal cliff deal that does not include raising tax rates on the wealthy, even if the agreement raised revenue.
“No,” Pelosi told ABC’s Martha Raddatz when asked if she could agree to a deal that caps deductions for the wealthy but does not raise rates.
“[T]he president made it very clear in his campaign that there is not enough — there are not enough — what you just described is a formula and a blueprint for hampering our future,” Pelosi said in the interview, which aired yesterday during ‘This Week.’ “You cannot go forward — you have to cut some investments. If you cut too many, you’re hampering growth, you’re hampering education, our investments for the future. So just to close loopholes is far too little money, if it’s — and it could be they have said they want it to be revenue-neutral. If it’s going to bring in revenue, the president has been very clear that the higher-income people have to pay their fair share.”
That comment puts Pelosi at odds with the calculations of the Congressional Budget Office. “According to the Congressional Budget Office, limiting itemized deductions to 15 percent of income would bring in $1.2 trillion over ten years,” The Washington Examiner’s Conn Carroll observes this morning. “That is almost $400 billion more in revenue than from just letting the top Bush rates expire.”
The revenue raised from rate increases or from capping deductions will not make a dent in the debt. “The annual budget deficit has been running at around $1.2 trillion,” The Wall Street Journal’s James Taranto reminded readers last week. “(The Hill reports the deficit for October alone was $120 billion.) Raising taxes on “the wealthiest 2%,” it is estimated, would increase government revenues $829 billion over a decade.”
Pelosi wouldn’t explicitly pledge to go over the fiscal cliff rather than cut a deal that doesn’t raise tax rates, as incoming Senate Budget Committee chairman Patty Murray D-Wash., proposed last week.
“I don’t think that’s, in my view, as one with a seat at the table, I don’t think it’s my role to go to the table with a threat,” she said. “I’m not criticizing statements others make, but what I am saying is that there’s too much at risk. And even if you went over the cliff for one month and then corrected it, you would still have a loss of GDP.”