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Pelosi Sits on Tax Cut Sidelines

Outgoing Speaker Not Fighting for Obama’s Deal

Speaker Nancy Pelosi has never been one to shy away from a fight. But she appears to have made the calculation that selling a tax cut plan she doesn’t like and did not have a hand in negotiating won’t pay her any dividends.

Democrats are deeply divided over the tax cut deal President Barack Obama struck last week with Senate Minority Leader Mitch McConnell (R-Ky.), and Pelosi and her lieutenants understand the difficulty they face in trying to change it.

Senators voted overwhelmingly — 81-19 — for the measure on Wednesday, and there is a good chance the House will follow their lead today in approving it unchanged. The measure is expected to win the support of most House Republicans and a healthy share of Democrats, leaving Pelosi in a weaker position than she’s been used to over the past four years when she’s dictated the legislative agenda.

“She realizes that it’s a foregone conclusion that it’s going to pass the House,” said a senior Democratic aide with ties to moderates. “The one thing I think everyone can agree on about the Speaker is that she doesn’t like to lose a vote. … Why would she go out there in the mode to take something down when she knows it would just blow up in her face? … She doesn’t want to look like a fool.”

Today’s tax cut vote marks the first major legislative battle since Nov. 2, when Democrats lost the majority and Pelosi lost the Speaker’s gavel. Pelosi decided to stay on as Minority Leader in the next Congress despite the objections from some in her Caucus who wanted a change. Forty-three moderates voted for Rep. Heath Shuler (N.C.) instead.

Rep. G.K. Butterfield said he has witnessed a noticeable change in the Speaker’s style since the midterm elections.

“During the push-back the other day on the tax cut package, she listened,” the North Carolina Democrat said. “It was very refreshing.”

“I watch her and she listens to people,” Rep. Henry Cuellar (D-Texas) said. “You can see when she’s listening.”

Rep. Joe Crowley also acknowledged a shift in Pelosi’s demeanor. The New York Democrat said Pelosi’s taking a “nuanced” approach and that the entire leadership team has been in “listening mode” on the $858 billion tax package, which would extend all George W. Bush-era tax cuts for two years, prolong unemployment benefits for 13 months and cut payroll taxes by 2 percent for a year.

House Democrats voted last week against bringing the deal to the floor without changes — they are particularly unhappy with its estate tax provisions — and Pelosi said she would heed the will of her Members.

Still, Democratic leaders have opted not to block the package completely. Crowley said there is “a recognition that they want to be helpful to the president.”

One Democratic Member argued that Pelosi hasn’t suddenly slipped into obscurity. Rather, this Member said Pelosi’s role is reflective of the larger position of the Democratic Caucus, which was left out of the negotiations that led to the final tax bill. “This is a different situation,” the lawmaker said. “We were not directly involved in this, and that was never the case before the election. We were the leaders. We were the ones getting these things passed.”

Behind the scenes, the Democratic Member said, Pelosi has “been very out there trying to explain the situation to Caucus members,” noting that she spoke on the issue for roughly 25 minutes Tuesday night at a closed-door meeting.

Pelosi isn’t known to sit in the shadows, however. As Speaker, she very publicly championed the party’s most controversial and high-profile priorities such as health care reform and cap-and-trade. But Democrats noted that Pelosi has been a fierce opponent of extending the 2001 and 2003 tax cuts for wealthy Americans, a core piece of the tax measure. “It’s been clear in leadership meetings and Caucus meetings, she doesn’t like this deal,” another senior Democratic aide said. “It puts her in a really difficult position to go out and try to sell it. So she isn’t.”

Pelosi has forcefully advocated for extending the tax cuts for the middle class, and has made clear she opposes the Senate package’s provisions dealing with the estate tax. In recent days, Assistant to the Speaker Chris Van Hollen (Md.) and House Majority Leader Steny Hoyer (Md.) have taken the lead in publicly outlining Democrats’ objections to the Senate package and providing clues on the House strategy for taking up the measure.

Pelosi’s handling of the tax cut issue may also speak to how she is likely to deal with the White House and its agenda next year. In this case, Democrats said Pelosi has been able to send a message to the president and her Caucus that she will not carry water for the administration on policies with which she does not agree.

“She’s doing the right thing to say, ‘Hey, White House, you still need the other side of the Congress to pass things,’” Cuellar said.

A Democratic leadership aide predicted that Pelosi would find herself at odds with Obama more often should her legislative priorities differ from his.

“In the minority, she’ll continue to fight for the values held by the Democratic Caucus even if they differ from the president,” the aide said. “It was her finding the path and finding the way to pass the president’s agenda over the last two years, and now that the White House has decided to take the lead, the House-White House dynamic could change a bit. But she’ll still play the same role: fighting for the priorities of the Democratic Caucus.”

Anna Palmer contributed to this report.