Sanders and Pelosi are locked in a dispute over a tax cut for rich Americans.
"It's bad policy, bad politics," Sanders said after Pelosi said she would "fight" to keep the tax break in.
Democrats are uneasy with efforts to provide a bigger state and local tax deduction for people in high-tax blue states.
Top Democrats are clashing on tax cuts for the rich as the party edges closer to advancing President Joe Biden's social spending bill on Thursday.
Speaker Nancy Pelosi of California defended a measure to lift the amount of state and local taxes (SALT) that people can deduct from their federal tax bills to $80,000 from $10,000 through 2026. The $10,000 limit was imposed under President Donald Trump's 2017 tax law.
"This isn't about who gets a tax cut, it's about which states get the revenue they need in order to meet the needs of the people," she said at her weekly press conference. "That is a fight that I will continue to make."
She claimed that tax cuts for the rich "isn't the result" of the House bill. But experts say lifting the SALT cap would overwhelmingly benefit richer Americans. The nonpartisan Tax Policy Center projects most millionaires would be in line for a tax cut under the House Democratic proposal.
Sen. Bernie Sanders of Vermont pushed back against Pelosi, saying "I think it's bad politics, it's bad policy."
"Bottom line, We need to help the middle class, not the 1%," he told CNN's Manu Raju.
Their dispute comes as Democrats become increasingly anxious with the largest slice of Biden's social spending bill: a tax cut for rich Americans residing in high-tax, predominantly blue states.
"This is giving them a better deal than they had even before 2017," Brian Riedl, a budget expert at the right-leaning Manhattan Institute, told Insider. "They will have more benefits under Democrats than even Republicans gave them under President Trump."
Other Democrats are uneasy with the SALT provision. Sen. Jon Tester of Montana told NBC News he wasn't "a big fan" of the idea because "it gives tax breaks to the wrong people."
"It would be preposterous if this legislation ends up cutting taxes for the wealthiest people in America," Democratic Sen. Michael Bennet of Colorado recently told Insider.
It's also generating frustration in the House. Rep. Jared Golden of Maine, a vulnerable Democrat in next year's midterms, wrote on Twitter that SALT relief appeared like something Republicans would do instead.
"The fact that more people and orgs on the Democratic side aren't up in arms about this is wild," he wrote in a follow-up tweet.
Rep. Don Beyer of Virginia, a member of the tax-writing House Ways and Means panel, told Insider it "absolutely" becomes more difficult for Democrats to tout the legislation to the public if it delivers a hefty tax cut to the rich.
"When you just do the math and you find out that most of it's going to the very, very wealthy, it makes it harder to support," Beyer said.
Sanders is spearheading negotiations design an alternate plan alongside Sen. Bob Menendez of New Jersey that would cut the level of tax benefits for the wealthy. They're eyeing an income cap ranging between $500,000 and $550,000.
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