Pelosi's gambit

The Madness of Queen Nancy

Excerpt:

It's one thing to be serene under fire, it's another to be delusional.

More than a few Democrats in Congress are perplexed and worried that House Speaker Nancy Pelosi is insisting on ramming through a 1,900-page health care bill on Saturday, just days after her party took heavy losses in Tuesday's elections. "It reminds me of Major Nicholson, the obsessed British major in the film 'Bridge on the River Kwai,'" one Democrat told me. "She is fixated on finishing her health care bridge even as she's lost sight of where it's going and what damage it could cause to her own troops."

Indeed, the Speaker's take on Tuesday's off-year elections struck some of her own members as delusive "happy talk." "From our perspective, we won last night," a cheerful Ms. Pelosi told reporters, citing her party's pick-up of a single House seat in a New York special election and retention of another strongly Democratic seat in California.

That's not how many of her own troops see it. Democratic Rep. Parker Griffith of Alabama told Politico.com that members are "very, very sensitive" to the fact that the agenda being pushed by party leaders has "the potential to cost some of our front-line members their seats"

On health care, added New Jersey Democrat Bill Pascrell: "People who had weak knees before are going to have weaker knees now."

Ms. Pelosi, however, apparently thinks the moment is ripe to use sheer political muscle to pass legislation reordering one sixth of the economy, with zero Republican support. The right mixture of "incentives" and Rahm Emanuel-style pressure, she believes, will bring enough Democrats to heel to vote for the bill.

Comment: a trio of WSJ editorials!

The Return of the Inflation Tax: The Pelosi tax surcharge applies to capital gains and dividends

Excerpt:

Americans of a certain age have seen this movie before. In 1960, only 3% of tax filers paid a 30% or higher marginal tax rate. By 1980, after the inflation of the 1970s, the share was closer to 33%, according to a Heritage Foundation analysis of tax returns.

These stealth tax increases—forcing ever more Americans to pay higher tax rates on phantom gains in income—were widely seen to be unjust. And in 1981 as part of the Reagan tax cuts, a bipartisan coalition voted to index the tax brackets for inflation.

In order to raise enough money to make their plan look like it won't add to the deficit, House Democrats have deliberately not indexed two main tax features of their plan: the $500,000 threshold for the 5.4-percentage-point income tax surcharge; and the payroll level at which small businesses must pay a new 8% tax penalty for not offering health insurance.

This is a sneaky way for politicians to pry more money out of workers every year without having to legislate tax increases. The negative effects of failing to index compound over time, yielding a revenue windfall for government as the years go on. The House tax surcharge is estimated to raise $460.5 billion over 10 years, but only $30.9 billion in 2011, rising to $68.4 billion in 2019, according to the Joint Tax Committee.

Hello, Tipping Point

Excerpt:

The White House knew its liberal agenda would prove unpopular in many parts of the country represented by Democrats. So long as the president looked strong, those Blue Dogs and freshmen and swing-state senators would stick. Show them any sign of weakness, however, and rattled Dems would begin to care more about their own re-elections than they did their president.

Tuesday, the White House hit that tipping point.

To understand why, join some of those "nervous Democrats" who at this very moment are digging into, say, Virginia's returns. Last year, Dems captured three GOP House seats in the Old Dominion as the state voted for its first Democratic president since 1964. This week, those very same districts provided Democrats their first proof that the Obama agenda is a liability.

Comment: The third article details how Pelosi's gambit could sink some Democratic congressmen in 2010!