Democrats Oppose Combined Omnibus, Extenders Bill, Pelosi Says

For the past several weeks, staff from Appropriations, Ways and Means, and the Leadership have been working to narrow the differences on an Omnibus bill and a Tax Extenders package, both of which are planned for the Floor before Congress adjourns.

Following our Caucus and Whip meetings last week, it was clear that Democrats cannot support an Omnibus that includes the poison pill riders inserted by the Republican leadership. Furthermore, there is very little support for the Tax Extenders bill as written. There is also strong opposition to any thought of combining these bills.

On the Omnibus bill, House Democrats accepted the Republican budget number. We accepted how they decided to distribute the funds from the budget agreement. In order for us to support the Omnibus bill, the poison pill riders must go.

Given the cost of a permanent Tax Extenders bill, we attempted to ensure that the proposal contained priorities for working families, including making the Child Tax Credit permanent and indexing it to inflation. However, the indexing has been rejected by the Republicans. During the Caucus meeting last week, it was clear that, in the absence of a balance between working families and business provisions, the permanent bill was on a dangerous path of being too large for Members to support. The Congressional Progressive Caucus underscored this point in a letter released after the Caucus, which is attached.

Tomorrow, at our Caucus meeting, we will have the opportunity to discuss these and other issues associated with this legislation. I wanted you to have this letter as a basis for these discussions.

Thank you for your leadership and friendship.

We write to express our concerns with the emerging bipartisan, bicameral agreement on the long-term extension of various corporate and individual tax provisions. While we agree on the importance of providing permanent extensions for key refundable tax credits that benefit working families, we are concerned that the current agreement is weighted too heavily towards corporate America, furthers the long-term Republican goal of creating separate fiscal responsibility standards for tax cuts and investments, and will open the door to further attacks on discretionary investments and our social safety net programs.

The package under consideration appears to be weighted towards corporate extenders, with approximately two-thirds of the package going towards business provisions which do not exist in current law. Additionally, we are extremely concerned that three particularly egregious provisions -- bonus depreciation, active financing, and the Controlled Foreign Corporation (CFC) look-through rule -- could be permanently extended in this legislation. According to the Congressional Research Service, bonus depreciation provides limited economic benefits and should only be utilized as a temporary, stimulus measure during economic downturns. Permanent extensions of active financing and the CFC look-through rule would cost $100 billion over the next 10 years and would continue to incentivize offshoring and tax avoidance by large, profitable multinational corporations.

Additionally, it is outrageous that the Republican leadership continues to require that discretionary and mandatory investments be fully paid for, while massive, permanent changes to the tax code can be financed by deficit spending. Recent large bipartisan fiscal deals -- the 2013 and 2015 sequestration deals, this year's SGR repeal agreement, and the 2012 "fiscal cliff" agreement -- have consistently failed to include revenue increases and, instead, have been financed completely by spending cuts and miscellaneous fees. If we continue down this path, our party risks being complicit in establishing a "new normal" where the debt only matters when it comes to undermining Democratic priorities and programs that a majority of Americans rely on.

In the long-term, the continued erosion of federal revenues will place additional pressures on our already historically-underfunded discretionary budget and the social safety net. For example, it's already become common practice to extend the sequester cuts to Medicare to pay for other domestic investments. As long as concerns about the national debt remain a dominant political narrative in our country, every deal that cuts revenues will strengthen the hands of those who would seek to privatize Social Security and eliminate Medicare as we know it.

With the Earned Income Tax Credit, Child Tax Credit, and American Opportunity Tax Credit extended through 2017, now is not the time to make a bad deal weighted towards Republican priorities. If a deal needs to be secured to extend these key provisions, it should be done at a time when we have maximum negotiating leverage for a balanced and fiscally responsible deal.

While the CPC supports many of the provisions in this proposed agreement, especially the proposed delay or repeal of the so-called "Cadillac Tax," we strongly encourage you to consider the damage this deal could do to the long-term health of the progressive agenda in our country. We appreciate your attention to our views on this critical matter and all your work on behalf of working families and our country.