DarrinS
07-20-2009, 04:09 PM
http://online.wsj.com/article/SB124804459318663479.html
A group of Democrats elected in recent years from some of the country's richest congressional districts have emerged as a stumbling block to raising taxes on the wealthy to pay for President Barack Obama's ambitious health-care overhaul just as the plan has begun to meet increasing resistance over its cost.
Friday, two freshmen representatives -- Dina Titus, from suburban Las Vegas, and Colorado's Jared Polis, representing Boulder, Vail and some of the tonier suburbs of Denver -- joined Republicans to vote against Mr. Obama's top-priority health-care overhaul when it faced a vote in their House Education and Labor Committee. One reason was a one-percentage point-surtax on couples earning between $350,000 and $500,000 -- gradually increasing to 5.4 percentage points on earnings more than $1 million -- to pay for it.
The bill passed the committee anyway, but if the number of Democratic defectors grows it could pose a serious obstacle to the president.
Also on Friday a busload of freshmen Democrats went to the White House to plead their case against sharp tax increases with the president and his chief of staff, Rahm Emanuel. The organizer was Rep. Gerald Connolly, the president of the freshman class whose Northern Virginia district is the richest in the U.S. as measured by median household income.
"There could come a time," said Rep. Michael McMahon, a freshman Democrat from New York City's borough of Staten Island, when Democrats are in open rebellion. "We will certainly see in the next few weeks where we are going."
Election gains in some of these affluent regions have helped give Democrats big majorities in the House and Senate. Of the 25 richest districts, 14 are represented by Democrats, according to Congressional Quarterly. In 1995, Democrats represented just five of those districts.
Recently elected Democrats from higher-income areas also have been cautious about legislation that would make it easier for labor unions to organize, and about legislation imposing tough new rules on banks. Republicans have savaged the new Democrats for supporting legislation to stem global warming by capping greenhouse-gas emissions, then forcing polluters to purchase and trade emissions credits -- a "cap and tax," the GOP says.
But planned tax increases are likely the source of the toughest intra-Democratic tensions. The president wants to allow George W. Bush's income-tax cuts to expire in 2011 for families earning at least $250,000 and to stop the estate tax from being repealed next year. Mr. Obama also campaigned on putting an additional payroll tax of two to four percentage points on incomes above $250,000 to help put Social Security back on solid footing. As the president confronts a surging budget deficit and presses his ambitious agenda, all those tax increases may be necessary to make ends meet.
All together, Democratic plans could push the top tax rate to 47%, the highest level since the tax code was rewritten in 1986.
Republicans remain strongly unified in their opposition to the president, who has promised not only to create a national health-care plan, ease the nation away from fossil fuels and overhaul education, but also to pay for it all -- largely through higher taxes and other fees.
Strong Democratic majorities, especially in the House, give the White House plenty of latitude. But if wary freshmen team with the more seasoned centrists in the fiscally conservative Blue Dog Democrat coalition, who are threatening the health bill in the House Energy and Commerce Committee, the coalition could be formidable.
The White House defends its approach. "The bottom line is that I think the president believes that the richest 1% of this country has had a pretty good run of it for many, many, many years," said White House spokesman Robert Gibbs.
Mr. Connolly, the Northern Virginia representative, has a different calculation. Households earning at least $200,000 represent 14% of his district, "and they all vote," he said.
"They're just hanging themselves," says Republican Rep. Sam Graves, who last year beat back a spirited challenge in his northwestern Missouri district, which includes suburban Kansas City, and said he is looking forward to a race on taxes in 2010.
The tax issue is presenting many new Democrats with a quandary as they struggle to get their political footing. "These members are going to have to make their own determinations on how to balance these interests," said Maryland Rep. Chris Van Hollen, chairman of the Democratic Congressional Campaign Committee and himself a representative of the affluent suburbs of Washington.
The issue of taxes has long bedeviled Democratic candidates, but in 2008, Mr. Obama took control of it. He campaigned hard on tax cuts for the middle class, savaged as a tax increase Republican Sen. John McCain's proposal to subject the value of health-insurance benefits to income taxation, and convinced most Americans they would be unaffected even as he said he would allow taxes to rise on the rich.
But as Democrats who served in Congress in 1994 will attest, the game changes when abstractions on taxing the rich turn to reality. President Bill Clinton's 1993 deficit-reduction plan largely focused tax increases on the rich, but the collateral damage on Democrats was broad. And nobody wants to be the next Marjorie Margolies-Mezvinsky, the suburban Philadelphia House freshman who cast the deciding vote on the Clinton budget, only to be swept from office the next year.
"I never should have been asked to take that vote, ever," said Ms. Margolies-Mezvinsky, who now runs Women's Campaign International, a Philadelphia-based group with a mission to empower women politically.
Since the 1994 GOP sweep, districts like Ms. Margolies-Mezvinsky's have swung back to the Democrats. For 14 years, Republican Tom Davis represented most of Northern Virginia's Fairfax and Prince William counties. Now, Fairfax and Prince William belong to Mr. Connolly. Rep. John Hall took over the Hudson River Valley suburbs of New York after defeating veteran Republican Sue Kelly in 2006.
Boulder's Mr. Polis authored a letter on Friday, signed by 21 freshmen and one sophomore, Rep. Paul Hodes of New Hampshire, opposing the surtaxes. "Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery," they declared.
For now, most freshmen aren't saying how they will vote on the House health-care bill. Mr. McMahon, whose New York district also includes parts of Brooklyn, said there is no open revolt, but there have been two meetings with House Speaker Nancy Pelosi, and there was the White House meeting Friday with Messrs. Obama and Emanuel. Taxes dominated what Mr. Connolly described as a cordial but inconclusive discussion.
"I spend all my time here making the case that the profile of the rich doesn't stand in my district," Mr. McMahon said. "People feel that they're getting hit from all sides."
A group of Democrats elected in recent years from some of the country's richest congressional districts have emerged as a stumbling block to raising taxes on the wealthy to pay for President Barack Obama's ambitious health-care overhaul just as the plan has begun to meet increasing resistance over its cost.
Friday, two freshmen representatives -- Dina Titus, from suburban Las Vegas, and Colorado's Jared Polis, representing Boulder, Vail and some of the tonier suburbs of Denver -- joined Republicans to vote against Mr. Obama's top-priority health-care overhaul when it faced a vote in their House Education and Labor Committee. One reason was a one-percentage point-surtax on couples earning between $350,000 and $500,000 -- gradually increasing to 5.4 percentage points on earnings more than $1 million -- to pay for it.
The bill passed the committee anyway, but if the number of Democratic defectors grows it could pose a serious obstacle to the president.
Also on Friday a busload of freshmen Democrats went to the White House to plead their case against sharp tax increases with the president and his chief of staff, Rahm Emanuel. The organizer was Rep. Gerald Connolly, the president of the freshman class whose Northern Virginia district is the richest in the U.S. as measured by median household income.
"There could come a time," said Rep. Michael McMahon, a freshman Democrat from New York City's borough of Staten Island, when Democrats are in open rebellion. "We will certainly see in the next few weeks where we are going."
Election gains in some of these affluent regions have helped give Democrats big majorities in the House and Senate. Of the 25 richest districts, 14 are represented by Democrats, according to Congressional Quarterly. In 1995, Democrats represented just five of those districts.
Recently elected Democrats from higher-income areas also have been cautious about legislation that would make it easier for labor unions to organize, and about legislation imposing tough new rules on banks. Republicans have savaged the new Democrats for supporting legislation to stem global warming by capping greenhouse-gas emissions, then forcing polluters to purchase and trade emissions credits -- a "cap and tax," the GOP says.
But planned tax increases are likely the source of the toughest intra-Democratic tensions. The president wants to allow George W. Bush's income-tax cuts to expire in 2011 for families earning at least $250,000 and to stop the estate tax from being repealed next year. Mr. Obama also campaigned on putting an additional payroll tax of two to four percentage points on incomes above $250,000 to help put Social Security back on solid footing. As the president confronts a surging budget deficit and presses his ambitious agenda, all those tax increases may be necessary to make ends meet.
All together, Democratic plans could push the top tax rate to 47%, the highest level since the tax code was rewritten in 1986.
Republicans remain strongly unified in their opposition to the president, who has promised not only to create a national health-care plan, ease the nation away from fossil fuels and overhaul education, but also to pay for it all -- largely through higher taxes and other fees.
Strong Democratic majorities, especially in the House, give the White House plenty of latitude. But if wary freshmen team with the more seasoned centrists in the fiscally conservative Blue Dog Democrat coalition, who are threatening the health bill in the House Energy and Commerce Committee, the coalition could be formidable.
The White House defends its approach. "The bottom line is that I think the president believes that the richest 1% of this country has had a pretty good run of it for many, many, many years," said White House spokesman Robert Gibbs.
Mr. Connolly, the Northern Virginia representative, has a different calculation. Households earning at least $200,000 represent 14% of his district, "and they all vote," he said.
"They're just hanging themselves," says Republican Rep. Sam Graves, who last year beat back a spirited challenge in his northwestern Missouri district, which includes suburban Kansas City, and said he is looking forward to a race on taxes in 2010.
The tax issue is presenting many new Democrats with a quandary as they struggle to get their political footing. "These members are going to have to make their own determinations on how to balance these interests," said Maryland Rep. Chris Van Hollen, chairman of the Democratic Congressional Campaign Committee and himself a representative of the affluent suburbs of Washington.
The issue of taxes has long bedeviled Democratic candidates, but in 2008, Mr. Obama took control of it. He campaigned hard on tax cuts for the middle class, savaged as a tax increase Republican Sen. John McCain's proposal to subject the value of health-insurance benefits to income taxation, and convinced most Americans they would be unaffected even as he said he would allow taxes to rise on the rich.
But as Democrats who served in Congress in 1994 will attest, the game changes when abstractions on taxing the rich turn to reality. President Bill Clinton's 1993 deficit-reduction plan largely focused tax increases on the rich, but the collateral damage on Democrats was broad. And nobody wants to be the next Marjorie Margolies-Mezvinsky, the suburban Philadelphia House freshman who cast the deciding vote on the Clinton budget, only to be swept from office the next year.
"I never should have been asked to take that vote, ever," said Ms. Margolies-Mezvinsky, who now runs Women's Campaign International, a Philadelphia-based group with a mission to empower women politically.
Since the 1994 GOP sweep, districts like Ms. Margolies-Mezvinsky's have swung back to the Democrats. For 14 years, Republican Tom Davis represented most of Northern Virginia's Fairfax and Prince William counties. Now, Fairfax and Prince William belong to Mr. Connolly. Rep. John Hall took over the Hudson River Valley suburbs of New York after defeating veteran Republican Sue Kelly in 2006.
Boulder's Mr. Polis authored a letter on Friday, signed by 21 freshmen and one sophomore, Rep. Paul Hodes of New Hampshire, opposing the surtaxes. "Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery," they declared.
For now, most freshmen aren't saying how they will vote on the House health-care bill. Mr. McMahon, whose New York district also includes parts of Brooklyn, said there is no open revolt, but there have been two meetings with House Speaker Nancy Pelosi, and there was the White House meeting Friday with Messrs. Obama and Emanuel. Taxes dominated what Mr. Connolly described as a cordial but inconclusive discussion.
"I spend all my time here making the case that the profile of the rich doesn't stand in my district," Mr. McMahon said. "People feel that they're getting hit from all sides."