House Minority Leader Nancy Pelosi said Sunday that Democrats would not support a bargain with Republicans that only includes revenue increases from eliminating tax deductions and credits. Tax rate increases must also be part of the package, Pelosi insisted. Conservative pundit Bill Kristol said he expects Republicans to go along with a tax rate increase.
Congressional leaders met with President Barack Obama on Friday to discuss plans to avoid the "fiscal cliff" and chart a path forward on a "grand bargain" deficit reduction package. Pelosi described the meeting as congenial.
"The spirit at the table was one of, everybody wants to make the best effort to get this done," Pelosi said in an interview on ABC's "This Week."
The groundwork for a grand bargain that would both raise revenue through tax reform and cut spending through entitlement reform has already been laid by Obama's deficit reduction commission, or "Bowles-Simpson," the Bipartisan Policy Center's deficit reduction commission, or "Rivlin-Domenici," and the negotiations between Obama and Speaker of the House John Boehner in July 2011.
All three of those decided to raise revenue by eliminating deductions and credits while lowering the tax rates. After Obama was re-elected, Boehner said raising revenue through tax reform is still an acceptable compromise.
Pelosi, though, said she would not accept a plan that does not also increase tax rates. When asked if a plan to raise revenue just through reforming the tax were acceptable, Pelosi's one word answer was, "no."
"What you just described is a formula, and a blueprint, for hampering our future," Pelosi added.
The problem, Pelosi said, was that there would not be enough tax revenue to fund government programs, which she called "investments."
"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."
Kristol, editor of The Weekly Standard, said the same day on "Fox News Sunday" that he expects Republicans to go along with a tax rate increase because it would not be in their interest to use the little leverage they have to stop it.
"I believe Republicans will yield, a little bit, on top rates," Kristol said, noting that Obama ran and won twice on the platform of raising taxes on the upper income.
Kristol made the same point last week, which generated much discussion among the Washington elite. When asked about the reaction among Republicans, Kristol said it was mostly positive.
"The private reaction among Republican congressmen, honestly, including very conservative ones, was, 'I don't know, do we really have to give in? I guess maybe we do. Maybe it was good that you said that because we do need to cut a deal,'" Kristol said.
Washington Post reporter Bob Woodward, sitting next to Kristol, joked that the Tea Party would burn his membership card.
"A lot of the Tea Party guys don't care that much if a few millionaires pay a couple percent more in taxes, honestly," Kristol countered.