Speaker Pelosi differs from Obama on taxes, probes

[January 19, 2009]  WASHINGTON (AP) -- House Speaker Nancy Pelosi appears to differ from Barack Obama on at least two issues -- tax increases and investigating the Bush administration.

But the two Democrats agree on the need to address the soaring cost of entitlements such as Social Security and Medicare.

The speaker said Sunday she wants Congress to consider repealing President George W. Bush's tax cuts on those who make more than $250,000 well before they expire at the end of 2010. Obama had promised to repeal the tax cuts as well during the presidential campaign, but he has since backed off that pledge, signaling he would be willing to simply let them expire.

"We had campaigned in saying what the Republican Congressional Budget Office told us: Nothing contributed more to the budget deficit than the tax cuts for the wealthiest people in America," Pelosi said in an interview broadcast Sunday.

The California Democrat is pushing the president-elect to make good on a campaign promise that attracted some of the harshest criticism during the election -- that Obama is a typical tax-and-spend Democrat who would raise taxes once in office.

Obama has fought that label, emphasizing that any tax increase would be directed at those making more than $250,000. However, since the election, Obama has been reluctant even to raise taxes on people making that much.

Lawrence Summers, Obama's choice for director of the National Economic Council, signaled again Sunday that repealing the Bush tax cuts would not be a priority.

"Our overall focus is going to be on increasing spending," Summers said in a broadcast interview. "Beyond that, there's going to be a substantial tax cut for the American people."

Obama's aides worked with House Democrats to craft their version of an economic stimulus package. The package, unveiled last week, includes $550 billion in government spending and $275 billion in tax cuts. It would leave the Bush tax cuts in place.

Pelosi said she won't use the stimulus bill to address tax cuts. But she also said: "I don't want them to wait two years to expire. Because they have to prove their worth to me as to how they grow the economy, how they create jobs."

Republicans disputed the House speaker's assertion about tax cuts and the deficit.

"There is no CBO report that says tax cuts for the wealthiest are the biggest contributor to the deficit," said Don Stewart, spokesman for Senate GOP leader Mitch McConnell of Kentucky. "Though we agree that Congress must carefully pursue ways to strengthen our economy, raising taxes won't grow jobs."

A spokeswoman for House Republican leader John Boehner of Ohio said Pelosi's assertion was "flat wrong."

"Congressional Democrats need to understand that the best way to get our deficits under control is to confront spending," spokeswoman Antonia Ferrier said.

Also Sunday, Pelosi said she wants an investigation into whether the Bush administration broke the law when it fired a group of federal prosecutors.

"I think that we have to learn from the past, and we cannot let the politicizing of, for example, the Justice Department, go unreviewed," she said. "Past is prologue."

House Democrats last week recommended a criminal investigation to determine whether administration officials broke the law in the name of national security. Along with the fired prosecutors, the report cited interrogation of foreign detainees, warrantless wiretaps, retribution against critics and manipulation of intelligence.

The president-elect has been more cautious, saying he wants to look to the future, not to the past.

"I don't believe that anybody is above the law," Obama said in a recent television interview. "On the other hand, I also have a belief that we need to look forward, as opposed to looking backwards."

Pelosi and Obama appear to be on the same page when it comes to entitlements such as Social Security and Medicare. Obama announced last week that he would convene a "fiscal responsibility summit" in February to focus on long-term problems with the economy and the skyrocketing costs of benefit programs such as Social Security and Medicare.

"I support what he wants to do, to have a summit of that kind," Pelosi said Sunday. "We will have our own initiatives in the Congress to work with him on that."

Pelosi said everything should be on the table, including benefit cuts.

"The only thing we didn't want to put on the table is eliminating Social Security, Medicare and Medicaid," she said.

Pelosi appeared on "Fox News Sunday." Summers was interviewed on CBS' "Face the Nation."

[Associated Press; By LIBBY QUAID]

Associated Press writer Stephen Ohlemacher contributed to this report.

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