Pelosi Promises Fiscal Restraint If Democrats Win
Minority Leader Says Democratic-Run House Would Target Deficit
By DAVID ROGERS and SARAH LUECK
WASHINGTON -- House Minority Leader Nancy Pelosi pledged that if Democrats succeed next year in rolling back President Bush's tax cuts for the wealthiest Americans, the money would be used to reduce the federal deficit -- not for new spending.
Breaking with many Democrats, Ms. Pelosi also spoke out against earmarking billions of dollars for home-state projects, a practice she calls a "monster" that hurts Congress.
If she becomes speaker in the next Congress, she says, she would press to severely reduce earmarks. "Personally, myself, I'd get rid of all of them," she says. "None of them is worth the skepticism, the cynicism the public has... and the fiscal irresponsibility of it."
The California Democrat anticipates some resistance from within her party, but returned to the theme of fiscal prudence in an interview with The Wall Street Journal. When asked to outline the Democrats' agenda, she listed initiatives that she said wouldn't strain the government's coffers: cutting interest rates on student loans, raising the minimum wage and demanding higher royalties from oil companies.
"Not every single dollar" would go to the Treasury, she said, "but I hope that...we would use the rollback of the tax cuts" to address the deficit since "it is the biggest drain...on the next generation."
By contrast, Democrats on the House Appropriations Committee this year have proposed financing more domestic spending by scaling back tax cuts for high-income households. In a series of amendments -- all defeated by Republicans -- Wisconsin Rep. David Obey and other senior Democrats have proposed a partial rollback of the top-end tax cuts and then a 50-50 split of the resulting revenue, yielding about $13 billion for deficit reduction and $13 billion for domestic spending.
But Ms. Pelosi sees no contradiction, saying her party is boxed in now as the minority and will have more choices as the majority. "He's dealing with the hand he's been dealt," she says of Mr. Obey. "We're dealing the hand the next time."
But House Majority Leader John Boehner said the Democratic record this year shows the party has proposed to add billions of dollars in spending "over and above what is called for" in the administration's budget. "It is Republicans who have held the line on spending," Mr. Boehner said, and if Democrats were to find tax savings, "it wouldn't go into banks, they'd spend it."
Ms. Pelosi's comments come as the White House is celebrating a surge in federal tax receipts that has narrowed deficit projections and offered proof, Republicans say, of the value of the Bush tax cuts. But Democrats argue that given widening income disparities in the U.S., voters would oppose continued tax breaks for high-income Americans if the money will go to slow the government's red ink.
A Democratic strategy memo this week cites "foreboding" among voters that "this Republican government has bankrupted the country." In the memo, pollster Stan Greenberg and strategist James Carville wrote: "Democrats actually win their biggest advantage in this survey when we put a Republican tax-cut message against a Democratic one that attacks them for cutting taxes for the wealthy, running up the deficit and passing on the bill to our kids."
As for earmarks, Ms. Pelosi acknowledges her opposition will roil many in her own party. "I'm trying to take the caucus to that place," she says, adding "it is not realistic" now for her to expect earmarks to be eliminated.
Ms. Pelosi, who served for years on the House Appropriations panel, was dismissive of efforts by conservatives like Rep. Jeff Flake (R., Ariz.) to target individual earmarks. Instead, she says, wholesale changes have to be instituted to put a "harsh light" on the practice both in spending and tax bills.
Ms. Pelosi's remarks appear designed to address two liabilities: the Democrats' reputation as big spenders and her own California liberal image that has made her a favorite target for Republicans. Born into a prominent Italian-American political family in Baltimore, where her father and a brother were mayor, she emphasizes her Catholic, ethnic upbringing in interviews and speeches.
If elected the first female speaker in U.S. history, Ms. Pelosi, 66 years old, promises a new beginning and "civility" for the House. "You know I'm a partisan Democrat when it comes to my politics," she says. "But when it comes to being speaker of the House, if that were ever to happen, I view that title as speaker of the House, not speaker of the Democrats."
"Everyone's views can be heard," she says. "Republicans can bring bills to the floor... Hash it out and that's the policy."
Ms. Pelosi's appeals for bipartisanship and her relatively modest agenda recognize that even if Democrats take back one or both chambers in Congress in November, the majority would be slim and they would still have a Republican president. Republicans "are dying for us to put out some blimps," she laughs, but she is steering clear of big-ticket health-care proposals, such as universal insurance coverage or even narrower goals such as extending coverage to all children.
Instead, Ms. Pelosi says she is committed to a "pay-as-you-go" budget approach that would require any expansion of federal benefits to be offset by spending reductions elsewhere or new taxes.
In this vein, her first health-care goal will be to pass legislation that would allow the federal government to negotiate lower prescription-drug prices in the Medicare program. Such a move would strike at the Republican-backed drug-benefit program, which Democrats have criticized as costly and a "giveaway" to pharmaceuticals companies.
Parts of the Democrats' agenda have picked up bipartisan support in Congress. Yesterday, 64 Republicans joined Democrats on a 260-159 procedural vote in the House signaling support for a proposed $2.10 an hour increase in the minimum wage, which has been $5.15 for nine years.