As Democrats enact costly legislation, there is growing concern over how to pay for it. The record deficit will most likely be shouldered by a relatively small constituency of wealthy Americans. Now with the House Democrats’ healthcare bill featuring a surtax on the rich, Congressional Democrats representing these voters are worried about whether they can hold onto their seats.
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.
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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.
Freshmen Democrats are increasingly vocal about House leadership’s anti-wealth agenda. The Employee Free Choice Act, new bank regulations, and cap and trade are not popular with the voters who will be hit hardest by the changes. These pieces of legislation place disproportionate costs on small business owners and other high earners. Now that Democrats are planning a massive income surtax in the healthcare bill, members from wealthy districts are rightly worried about the 2010 midterms.
“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.”
These concerns have not slowed liberal plans for new taxes on the rich. Health and Human Services Secretary Kathleen Sebelius said on Meet the Press that the wealth surtax is a “legitimate way to go forward.”
Speaker Nancy Pelosi, however, indicated in an interview with Politico that she may be moderating her views.
Trying to sell a historic health bill to a balky caucus, House Speaker Nancy Pelosi told POLITICO in an interview that she wants to soften a proposed surcharge on the wealthy so that it applies only to families that make $1 million or more.
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The speaker would like the trigger raised to $500,000 for individuals and $1 million for families, “so it’s a millionaire’s tax,” she said. “When someone hears, ‘2,’ they think, ‘Oh, I could be there,’ because they don’t know the $280,000 is for one person.
“It sounds like you’re in the neighborhood. So I just want to remove all doubt. You hear ‘$500,000 a year,’ you think, ‘My God, that’s not me.’”
Certainly, raising the bar is a step in the right direction, but this could still be a sticking point with Democrats from wealthy districts. If Democrats don’t learn to control their tax-and-spend approach to governing, Republicans could stride to easy victories in these swing districts.