July 27 (Bloomberg) -- U.S. House Democratic leader Nancy Pelosi said in an interview on Bloomberg Television’s “Political Capital With Al Hunt,” airing this weekend, that Republicans are using Israel in this year’s political campaigns to distract from their tax-cutting agenda.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: Welcome to the show. We start with the Democratic leader of the House of Representatives, Nancy Pelosi of California. Thank you for being with us, Madam Leader.
REPRESENTATIVE NANCY PELOSI: My pleasure.
HUNT: Let’s talk about the pending fiscal cliff at the end of the year. First, tax cuts expire, spending sequestration. I know your position about the - the GOP won’t compromise on tax cuts to the rich, but you’re asking your Democrats to probably stand behind the president on this, and yet every time before he has negotiated, caved, capitulated, whatever term you want. Do you think the president will really hang tough this time?
PELOSI: I think the president has hung tough. First of all, let’s avoid the cliff. Why should we even be talking in those terms? And we all are, so I - I agree with your characterization, that that’s conversation. But it shouldn’t be.
We can right now today pass middle-income tax cuts, which assume the expiration of the high-end tax cuts. That’s $800 billion.
HUNT: - will you offer the president’s plan as an alternative, if given a chance, you Democrats?
PELOSI: We would offer the - what passed the Senate, which is the president’s plan, yes. We would also have another bill to address the estate tax, as well. Our main bill will be -
PELOSI: But let me say that my caucus has stood with the president a year ago with a plan that would reduce the deficit by $4 trillion. Many cuts, investments in growth, and assuming the expiration of the high-end tax cuts. He had that conversation with the speaker. The speaker, we thought there was agreement. The speaker walked away from that. But we should return to some, not just to avoid the sequestration, which is $1.1 trillion, an enormous amount of money, but we need more deficit reduction from that.
HUNT: But if you can’t do that because the clock is running and for whatever reason you can’t do it, would you favor - or would you be willing to support a three-month extension, say, of the tax cuts expiration, sequestration?
PELOSI: What would be the point?
HUNT: To give - to give the new Congress time to work out something.
PELOSI: Well, the fact is, is that everybody agrees, everybody agrees the middle-income tax cuts should continue. We can do that right now today. And then you can do whatever else you want to do. The beauty of it is, it helps middle-income families, A. B, it takes away some of the uncertainty -
HUNT: But that doesn’t address the sequestration -
PELOSI: No, it takes away some of the uncertainty, because we’re talking $800 billion that can be used for sequestration. And it eliminates all the talk about debt limit and the rest of that.
HUNT: So you would oppose any kind of extension of either the tax cut expiration or sequestration?
PELOSI: Well, what we’re talking about here is, how do we reduce the deficit? How do we have fiscal soundness, which is what is necessary for our credit rating and the rest? At the same time, stimulate our economy with a middle-income tax cut that will do that, and to do it in a way that has fairness and balance. Let’s go to the table -
HUNT: Do you think you can do it by the end of the year? I know you want to do it, but -
PELOSI: Of course we can.
HUNT: But do you think it will be done by the end of the year?
PELOSI: Well, the only thing standing in the way are the Republicans in the House of Representatives.
HUNT: Do you think they’ll change?
PELOSI: Well, hopefully all of your -
HUNT: You don’t sound optimistic.
PELOSI: All of your friends on Wall Street who are concerned about full faith and credit of the United States, who are concerned about certainty in our economy should be urging them to do just that. You can always discuss the other tax - whether it’s simplification and fairness. This is about fairness. It’s about balance. It’s about injecting demand into our economy to grow it. It’s about removing some of the uncertainty - can’t ever remove it all in the marketplace - but some of the fiscal uncertainty that is there.
All of my senior Democrats on the committees here have written to their chairman and asking them to sit down to negotiate what changes could be made to avoid the sequestration. Let’s do that now. What’s the - what does three months do, except make it a longer period of time, where we have uncertainty and no injection of demand into the economy by having the middle-income tax cuts?
HUNT: Let me turn to a couple foreign policy questions. Right before he left for Europe, Mitt Romney really lambasted the president at the veterans conference as a failed foreign policy that has appeased our enemies and - and not been friendly to our friends.
PELOSI: Well, let me say that I’m not - with all due respect to Mr. Romney, to use a veterans convention for a political speech is something that is, I just think, completely inappropriate, completely inappropriate. So the - I think it’s just really more important to hear what he has to say about where he wants to take this country in the future.
And what I’m concerned about is that he is wedded and supports the Ryan-Republican-Romney budget here, which will only increase the deficit, will break the Medicare guarantee. It’s a terrible budget. It’s not about growth in the future. It’s about, again, tax cuts for the wealthy.
By the way, in order to do that, you have to penalize the middle class. A person making over $1 million a year - perhaps you’re one of them - will get -
HUNT: I wish.
PELOSI: - will get a tax break of an average $160,000 a year. A middle-income person would get a tax increase of about $1,000 a year. That’s really what is important. His inappropriateness on this continent or another one is not important. What is important are his policies for how he would take the country -
HUNT: One more foreign policy question, though. He’s going to Israel, and your Republican - the Republican majority in the House, one of your counterparts, Eric Cantor, said Republicans have a golden opportunity with the Jewish vote this year because there’s a, quote, “real cloud over Obama’s chilliness with Israel.”
PELOSI: Well, you know what? That’s maybe his characterization, but that, in fact, this president - and hopefully during this campaign, it will become - this president has been a staunch supporter of Israel. Many of the things that he has done, in terms of Israel’s qualitative edge in terms of how we have - have supported Israel in that regard, for them to defend themselves, A, B, is two issues that relate to Iran. No president has done more -
HUNT: Do you think he’ll do as well with the Jewish vote this time as he did last time?
PELOSI: The election will tell us that.
HUNT: What do you think?
PELOSI: But I - I think that he will. I think that he will, because the fact is when the facts get out. You know, as many of the Republicans are using Israel as an excuse, what they really want are tax cuts for the wealthy. So Israel, that can be one reason they put forth.
HUNT: That’s why some of the Republican Jewish supporters are really active.
PELOSI: Well, that’s how they’re being exploited. And they’re smart people. They follow these issues. But they have to know the facts. And the fact is that President Obama has been the strongest person in terms of sanctions on Iran, which is important to Israel. He’s been the strongest person on whether it’s Iron Dome, David’s Sling, any of these weapons systems and initiatives that relate to Israel. He has been there over and over again.
HUNT: Should Mitt Romney be pressured by Democrats to release his previous tax returns?
PELOSI: I think he’s being pressured by the Republicans to release his tax returns.
HUNT: But how about Democrats? Is that an issue that you and the president and others should raise with him?
PELOSI: As I said, as far as Mitt Romney is concerned, I’m concerned about his policies -
HUNT: So you don’t really think that releasing his tax returns should be a big deal?
PELOSI: I think not releasing them is a big deal.
HUNT: Well, why don’t House members release theirs then?
PELOSI: Because we’re not running for president of the United States.
HUNT: But you’re a co-equal branch of government, aren’t you?
PELOSI: Well, when we all run for president, then we’ll have to take that into consideration. He could not even be a member of his own cabinet -
HUNT: Thank you very much, Congresswoman Pelosi, for being with us.
PELOSI: Thank you.
HUNT: When we come back, we’ll talk about Mitt’s moments in London.
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