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Nancy Pelosi’s expanded definition of the middle-class is running into criticism from old progressive allies fearful that the House Democratic leader is giving up too much in the battle over Bush-era tax cuts.
The Center on Budget and Policy Priorities weighed in Wednesday with a report saying that as much as $366 billion in 10-year-revenues would be lost under Pelosi’s plan allowing households earning up to $1 million — not just $250,000 — to be allowed to keep their lower tax rates after January.
That’s almost half of the $829 billion in potential revenue gains under the initial White House position, if President Barack Obama holds firm to the $250,000 limit.
“This means that policymakers ultimately would need to find $366 billion more in deficit savings to offset the cost,” the Center says. “That would make key programs ranging from Medicare to Medicaid and other low-income programs to education, basic research, food safety, defense, and homeland security significantly more vulnerable to deep cuts.”
The numbers illustrate the down side to the message war being waged by Democrats going into the fall elections. Pelosi opted for the higher threshold to build support in her party and try to isolate Speaker John Boehner (R-Ohio) as holding out for those earning $1 million or better.
But many Democrats winced at the notion of expanding the “middle class” so high, and the report from the Center — which has been a fierce critic of the House Republican budget — is intended to illustrate the practical result.