Watch CBSN Live

Pelosi: "Immorality" in GOP tax plan

House Minority Leader Nancy Pelosi, D-Calif., Assistant Minority Leader James Clyburn, D-S.C., Leader Pelosi, Rep. Sander Levin, D-Mich., ranking member of the Ways and Means Committee, and Minority Whip Steny Hoyer, D-Md. face reporters following the vote on the middle class tax cut, on Capitol Hill in Washington, Wednesday, Aug. 1, 2012. AP Photo/J. Scott Applewhite

(CBS News) Amid ongoing gridlock in Congress over the extension of Bush-era tax cuts, House Minority Leader Nancy Pelosi on Thursday laid into Republican lawmakers for passing a law that extends the cuts for all Americans, accusing them of choosing to "engage in the luxury of amnesia" over the economic impact of that decision, and reiterating the Democratic call for a "comprehensive" overhaul of the tax code.

The House proposal, which passed last night with the support of 19 Democrats and all but one Republican, would extend all Bush-era tax cuts for one year, but would end cuts passed in 2009 aiding approximately 25 million middle-class households. A Democratic plan, meanwhile, which would not have extended those cuts for incomes above $250,000, failed in the House.

"Yesterday you saw on the floor a proposal that for one year would give a tax cut of $160,000 -- $160,000 -- to people making over a million dollars a year," said Pelosi, D-Calif., in a press conference. "That would be on average. And at the same time, that same bill for one year would on average increase taxes on the middle class by around $1,000."

Obama sets stage for new tax cut debate
House votes to renew Bush-era tax cuts

The Obama administration issued a veto threat on the tax bill following its passage last night, though it is not expected to pass in the Senate.

"You have to give the Republicans credit: They're very clear about their agenda. When they talk about tax cuts for the rich they talk about rewarding success. What they don't talk about is the tax increase for the middle class, which is devastating to our country," Pelosi said.

Pointing to the 2008 economic crisis, Pelosi argued that the full package of Bush-era tax cuts had led the country to a "near depression" in the past, and lambasted Republicans for pushing policies that she said aimed to serve their wealthy friends.

"Now they're saying, 'Perhaps we shall all engage in the luxury of amnesia. Let's forget all of that and let's do it again, because our friends, they need these tax cuts.' And that's just not right," she said. "It didn't work before... It took us to a near depression. We don't want to go there again."

She argued tax reform needs to be bipartisan or nonpartisan, but then said the GOP tax proposal "almost has an immorality to it."

In a press conference immediately following Pelosi's, House Speaker John Boehner dismissed Democratic criticisms of the plan, and argued that the idea of implementing any tax hikes is "just flat-out nuts."

"Two years ago, on December 6th, 2010, President Obama said stopping a tax hike was the right thing to do for our economy," Boehner said. "What's changed? Economic growth is even worse now and the American people are still asking the question: Where are the jobs? But now the president...insists that our struggling economy needs a tax increases on small businesses.

"I think this is just flat-out nuts," Boehner added.

Mr. Obama has long called for a rollback of the controversial Bush-era tax cuts, and in 2008 campaigned on a promise to end the cuts for "the wealthiest Americans" while upholding them for those earning $200,000 or less. In December 2010, however, citing a lame duck congressional stalemate, the president agreed to extend the cuts for all taxpayers. The cuts expire at the end of 2012, and Mr. Obama has repeatedly said that he will not re-up them for America's highest earners.

Boehner contended that Mr. Obama as been "AWOL" in dealing with the deficit and debt, as well as the automatic sequester cuts that are slated to go into effect in 2013.

"Yesterday we sent a letter to Senate Majority Leader Harry Reid that said that if Democrats were to pass a bill to stop all the tax hikes, that we'd bring the House back; and, if they were to pass a set of reforms and cuts to replace the sequester, we would be happy to bring the House back," Boehner said. "By the end of the week only House Republicans will have passed a plan to address both of these threats. The only question now is, will Senate Democrats follow? We stand ready to act when they do."

He continued: "Washington Democrats are scared, they're hiding, desperately hoping to get through the fall election without anyone noticing that when it comes to Americans' future they have no plan."

View CBS News In