Democrats' War Funding Bill Adds Surtax on the Wealthy

By Jonathan Weisman
Washington Post Staff Writer
Thursday, May 15, 2008

House Democratic leaders yesterday embraced a surtax on the wealthy to pay for expanded education benefits for veterans of the wars in Iraq and Afghanistan, clearing the way for votes today on the last war funding bill of George W. Bush's presidency.

The surtax -- dubbed the "patriots' premium" by House Majority Leader Steny H. Hoyer (D-Md.) -- would raise the tax rate by half a percentage point on incomes of about $500,000 for individuals and $1 million for couples. Democratic leaders hope to pass an enhanced G.I. Bill as part of a $184 billion measure to fund the wars in Iraq and Afghanistan into next year and to finance domestic programs that include flood protection around New Orleans and extended unemployment benefits, among other provisions.

But the veterans benefits ran into united opposition from conservative Democrats. They complained that its $52 billion cost over 10 years would not be funded according to Congress's renewed pay-as-you-go deficit-control rules.

By fully paying for the initiative, House Speaker Nancy Pelosi (D-Calif.) virtually ensured passage today of three separate measures: one to fund the wars; another to finance domestic needs, such as extended unemployment benefits and expanded education aid for veterans; and a third that will once again seek to set a timeline for troop withdrawals from Iraq.

Pelosi said the tax is the least the affluent can do to provide benefits that would pay tuition for veterans at even the most expensive state universities. House Democratic leadership aides practically dared Republicans to oppose the measure.

"We'll see what the response is going to be," she said.

But the fate of the tax is very much in doubt. House Minority Whip Roy Blunt (R-Mo.) mocked the proposal as more evidence of Democrats' "single-minded determination" to pursue a political philosophy of "Why spend less when you can tax more?"

Patty Murray (D-Wash.), who is shepherding the war funding bill through the Senate, said expanded education assistance is a cost of war. If President Bush does not want to pay for the war through tax increases or spending cuts, he should not protest veterans' benefits, she said.

House Democratic leadership aides acknowledged that the tax will probably be stripped from the package in the Senate and then sent back to the House, where the G.I. Bill either will pass without funding or be whittled down and approved with less controversial offsets.

Bush has promised to veto any spending bill exceeding his war funding request of $108 billion for the fiscal year that ends Sept. 30. He is likely to accept Democrats' additional spending to finance the war into next year.

But the G.I. Bill presents the GOP with a quandary. It has the support of dozens of Republicans, including some House conservatives and senators such as John W. Warner (Va.). But it is opposed by Bush, the Pentagon and the presumptive Republican nominee, Sen. John McCain (Ariz.), who worry that its benefits might entice service members to leave the strained military rather than re-enlist.

Senate Democrats yesterday blocked an effort by McCain's allies to bring a more modest version of the proposal -- written by McCain and Sens. Lindsey O. Graham (R-S.C.) and Richard Burr (R-N.C.) -- to the Senate floor for a vote. Instead, they promise a vote as early as next week on the original version, drafted by Warner and Sen. James Webb (D-Va.).

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