Nadler: On Taxes GOP Are a Bunch of Gangsters

Progressive Democrats today blasted the framework of a tax agreement negotiated between President Barack Obama and Republican congressional leaders, calling it the product of "Republican blackmail."

Appearing on CBS' "Face the Nation," Rep. Jerrold Nadler, D-N.Y., likened the president's acquiescence to Republican demands to extend Bush-era tax cuts at the highest income levels to someone being roughed-up by the mob:

"The Republican block is saying, like a bunch of gangsters, 'It's a nice middle class tax cut - a pity something would happen to it! Unless you give the millionaires and billionaires a long-term tax cut, we're not going to permit the middle class to continue its tax cut.'

"But that millionaires' and billionaires' tax cut will cost $700 billion added to the deficit over the next ten years, which we can't afford," Nadler said.

He also said putting the proposed two-year extension in place would lead to it being made permanent.

"If we succumb to that blackmail now, when both the middle class and the upper end tax cuts expire in two years in the middle of a presidential election, why would I expect that the president and the Congress would then have the political gumption not to submit again to the Republican blackmail and in effect make it permanent?"

Nadler said making the cuts permanent would be the culmination of a 30-year Republican plan to "starve the beast" - "to create such massive tax cuts that we'll have to cut Social Security, Medicare, AIDS, education, housing and everything else."

[The proposal for a year-long payroll tax "holiday" - reducing employees' FICA withholding - would require Congress to borrow an additional $112 billion to make up the difference.]

When asked by host Bob Schieffer whether he and other House Democrats would be willing to let everyone's taxes go up on January 1 if it meant stopping the tax cuts for the rich, Nadler disagreed that that was the only alternative.

"I think the alternative is to say we're not going to submit to that blackmail, and let the president and the Democrats go to the people - who the polls show they want the upper end tax cuts not to continue but want the middle class tax cuts - and say, 'Don't submit to the blackmail,'" Nadler said. "I believe if we conducted a campaign like that for some time period, we'd win that. That's got to be done."

Also on the program, former Vermont Gov. Howard Dean discounted the suggestion that the president might face a primary opponent in 2012 owing to liberal anger over the tax extension proposal.

"I don't think he's going to face an opponent in the Democratic primary," Dean said. "I think that would be a bad thing for the country. I think it would be a bad thing for the Democratic Party. The history of people running against presidents in their own party is the challenger loses and then the president is weakened and loses.

"The president has done some things that I think are terrific," Dean said. "This is not one of them. But I think he will not get an opponent."

Dean agreed with Nadler that the current negotiated framework is "terrible" for the country in the long term.

"First of all, we're going to find out if the Republicans are serious about the deficits," Dean said. "This tax cut is not paid for. If you project out until 2018, the Bush tax cuts [are what] causes 50% of the deficit.

"Second of all, the 2% payroll tax sounds great, but in fact they take it out of the Social Security trust fund. Here we are complaining about the Social Security trust fund going broke, and we take $120 billion dollars of revenue out and use it for a payroll tax mitigation. This is a short-term Washington fix. It does nothing about the biggest long-term threat to America, which is the deficit.

"I don't hear Republicans, or Democrats, talking about the deficit [with this proposal]. There is no pain in this agreement. This is the easy way out for everybody. Much as everybody is complaining and hooting and hollering 'This is an inside-the-beltway fuss,' somebody needs to do something about the long term problems in this country, it's not in this bill."

Nadler said a real divide exists between the White House and House Democrats, for several reasons:

"People do not want to see those tax cuts for the upper income people permanentized, which we feel this may do. Second of all, Governor Dean is entirely right about the long-term risk for Social Security here. Now this one-time, one-year $120 billion tax cut in Social Security taxes will be paid for out of the general fund. That for the first time starts getting the general fund to subsidize Social Security for $120 billion a year, and bring Social Security into the deficit debate, which greatly undercuts the political support to avoid eviscerating Social Security a few years down the road."

The third problem creating the divide, Nadler said, is "the giveaway on the estate tax, which over ten years is $115 billion more than we should be doing."

When asked if Democrats can come up with a compromise with Republicans to ensure tax cuts for the middle class do not expire, Nadler said, "Well, I think you're going to have to come to a compromise, but this is a bad compromise.

"It really sacrifices the welfare of the country long-term."

When asked if he believed Mr. Obama had betrayed Democrats, Nadler demurred: "No, I'm not going to say the president betrayed his party. I think that he probably should have stood a little stronger and not gone along with what is the Republican blackmail attempt.

"He thinks that we can fix this in two years. I'm more skeptical of that."