Friday, January 04, 2013

Cleaver: What the fiscal cliff agreement will and will not do

(From Congressman Emanuel Cleaver)

When I grew up, Americans hoped for the best from their leaders. Now, they just hope we avoid the worst. I reluctantly and cautiously voted in favor of H.R. 8, the American Taxpayer Relief Act of 2012, also known as the legislation to avert the fiscal cliff, because I believe it is in reaching out and finding compromise that we find a way to move forward, keep our economy on the right track, and increase employment for hardworking people in Missouri’s Fifth District. 

For the first time in 20 years, Congress has acted on a bipartisan basis to vote for significant new revenue. This means millionaires and billionaires will pay their fair share to reduce the deficit, through a combination of permanent tax rate increases and reduced tax benefits. And this agreement ensures that we can continue to make investments in education, clean energy, and manufacturing that create jobs and strengthen the middle class.

The deal to avert the fiscal cliff will do a number of positive things:

  • extend middle-class tax cuts
  • extend credits for working families
  • extend unemployment insurance
  • raise $620 billion in revenue to pay down the deficit
  • capital gains and dividends rate set at 20% for higher incomes
  • expanded tax breaks for low-income Americans, including the Earned Income Tax Credit, the Child Tax Credit and the American Opportunity Tax Credit< renews package of business tax breaks
  • permanently patched the Alternative Minimum Tax to avoid raising taxes on the middle-class
The deal was full of changes, but there was also much left out and much work remains to be done. Scheduled cuts to doctors under Medicare were postponed for a year through spending cuts that haven't been specified. The farm bill was merely extended through the rest of the fiscal year, and while this saves us from the “milk cliff,” we still need to take a serious look at a robust reauthorization of the farm bill for our farmers and ranchers. The deal did not address the debt ceiling, the sequester, and it did not include the payroll tax holiday. This last provision has expired, which will lead to a 2% increase in taxes for all Americans, but an increase in the solvency of Social Security for all. 

It is important to remember that Congress has already cut spending in 2011, primarily in the Budget Control Act. Changes from that law have produced $1.5 trillion in budget cuts over the next ten years, in defense, international programs, and an array of domestic programs ranging from education to law enforcement, food safety, and environmental protection. As we move forward to address our ongoing fiscal challenges, both spending cuts and continuing to ask the wealthy to do a little more will be part of a balanced approach. Getting our deficit under control is a necessary step for the long-term health of our economy. Businesses here at home and abroad must have confidence in our ability to accomplish this for job growth and economic security to continue. This is something we must do not just for ourselves and our children, but our children’s children. I am committed to that goal. 

As with any compromise, there was something in the bill for both parties to protest. However, it is only in sticking together that we are going to be able to address the problems facing our country. With the new year beginning and the 112th Congress coming to an end, it is time for a reconsideration of the usual resolutions and a renewed commitment to compromise.

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