Wall Street Journal: Nancy Pelosi Drives Hard Bargain With Paul Ryan on Spending, Taxes

December 9, 2015
By: Kristina Peterson

In case House Speaker Paul Ryan (R., Wis.) was in any doubt, Minority Leader Nancy Pelosi (D., Calif.) has made it clear this week that she drives a hard bargain.

The two House leaders are facing their first serious battle of wills over Congress’s pile of year-end legislation. Republicans will grade Mr. Ryan, elected speaker in late October, on how many conservative policy measures he manages to attach to the spending bill needed to prevent a shutdown when the government’s funding runs out Friday night.

Mrs. Pelosi, determined to block as many GOP policy measures as she can, is demonstrating to the new speaker that Democrats’ support on must-pass legislation won’t come cheap. As such, she is working to prevent Republicans from securing all but the slimmest of policy victories. The outcome, if these issues aren’t resolved, could be a delay in securing government funding for fiscal year 2016, or, worse, a shutdown.

“I’m sure they’re both trying to send a message to one another,” said Rep. Tom Cole (R., Okla.), a senior member of the Appropriations Committee.

Mrs. Pelosi has been able to maintain her leverage even though her party holds its fewest number of seats in the House since the late 1920s. One reason is Democrats’ control of the White House. Another reason is that the most conservative Republicans often vote against their leaders on crucial legislation, forcing GOP brass to rely on Democratic votes. Many Republicans are expected to oppose the spending bill over funding levels they deem too high.

Long known as a tough negotiator, Mrs. Pelosi has stepped up her efforts in recent days on both the spending bill and legislation addressing a slew of lapsed and expiring tax breaks known as “extenders.”

On the spending bill, she has sought to block all GOP policy measures, or “riders,” that Democrats don’t like. Republicans have already opted not to seek an end to federal funding for Planned Parenthood or to repeal portions of the 2010 health law in the legislation, aides said. Now, Democrats are working to beat back GOP provisions aimed at curbing financial, environmental and labor regulations.

“Democrats cannot support an omnibus [spending bill] that includes the poison-pill riders inserted by the Republican leadership,” Mrs. Pelosi wrote in a letter to House Democrats this week.

On the tax legislation, she wants to index the $1,000 child tax credit to inflation, though it is unclear if she will prevail. She has also tried to ensure that GOP efforts to make some business tax breaks permanent are matched by permanent extensions of tax credits for low-income families.

Some House Democrats said Tuesday if those demands aren’t met, they will be willing to walk away from efforts to make a slew of temporary tax breaks permanent and instead end up simply extending them through the end of 2016.

Republicans said Mrs. Pelosi’s positions had slowed progress on the tax legislation and brought Congress closer to missing the spending bill’s Friday deadline.

“I like Nancy Pelosi,” said Senate Finance Committee Chairman Orrin Hatch (R., Utah), but he said her stance on the tax legislation was diminishing prospects of a bigger deal. “Hopefully, she’ll back off, because this could be a monumental bill.”

The gridlock over the tax legislation, in turn, is slowing negotiations over the spending bill. Lawmakers are trying to sort out which of the two bills could include last-minute deals on issues that have simmered on Capitol Hill all year.

House GOP leaders have said they may need to pass a short-term spending bill to keep the government running for a few days while a deal is finalized.

“She’s trying to bluff and thinks that we’re going to cave by Dec. 11,” Mr. Cole said of Mrs. Pelosi. “What we’ll end up with—if we don’t see Democrats become more flexible—is some sort of short-term extension, and we can all enjoy the weekend here in Washington.”

The White House is backing congressional Democrats by saying Mr. Obama wouldn’t sign a short-term spending bill unless an agreement was in hand and lawmakers just needed a couple of extra days to clear it through both chambers.

If Mr. Ryan “can’t pass bills with his far right wing and he wants us to help, then those bills should reflect our priorities and values,” said Rep. Steve Israel (D., N.Y.), a member of House Democratic leadership. “It may be a new speaker, but it’s the same far right caucus that continues to dominate House Republicans.”

Mr. Ryan told reporters Tuesday that he would continue negotiating beyond the Dec. 11 deadline if necessary, and he would stick to his pledge not to rush consideration of legislation.

“We’re not going to let an arbitrary Dec. 11 deadline stop us from getting this right,” he said. “We’re going to get the best agreement we can possibly get, and those negotiations are ongoing.”