Fiscal Cliff averted - Sandy Aid avoided
E-NEWSLETTER ~ January 2, 2013
I hope the New Year finds you and your loved ones happy and healthy.
The House passed, at almost the last possible minute last night, a bill to avert the so-called “Fiscal Cliff”-- the phrase coined by Federal Reserve Chair Ben Bernanke to describe the simultaneous $1.2 trillion budget cuts and expiration of the Bush-era tax cuts that took effect January 1. Chair Bernanke had said that going off the cliff would send the US “toppling back into recession.”
I voted in favor of the package, but the process by which this bill was reached was as appalling to me as it probably was to you. Everyone in America knew this deadline was coming, and there’s nothing in the final bill that couldn’t have been agreed to a week ago, or a month ago. So all the controversy has been self-defeating. Congress really needs to be doing all it can to keep the all-too-slow recovery moving forward-- and this debate damaged the momentum that’s been built up in recent months.
Regardless of the means by which it passed, I wanted you to know the details of the final bill:
-- Taxes on every individual’s first $400,000 of income ($450,000 for couples filing jointly) will be permanently set at current Bush-era levels, meaning income tax rates will not rise for the vast majority-- 98 percent-- of Americans and 97% of small businesses. Income tax rates above that threshold will be raised to the Clinton-era level of 39.6%.
-- The rate for capital gains and dividends above that $400,000 - $450,000 level will rise, too-- from 15% to 20% (which was also the Clinton-era capital gains rate).
-- The “Alternative Minimum Tax” is permanently indexed to inflation in order to avoid “creeping” down toward the middle class tax tables. The AMT has a major impact in states like ours and this fix will help many New Yorkers.
-- The estate tax will be set at 40%, with an exemption for the first $5 million, indexed to inflation, of an estate.
-- Tax credits for middle- and low-income Americans will now be extended for five years. These credits reduce the tax bills for parents paying for child care, parents and college students paying tuition, and low-income working families trying to get by.
-- At the same time, we are also extending the research and development tax credit for businesses-- an investment that will help make the new discoveries that will create new jobs.
-- Federal unemployment insurance for the long-term unemployed will be extended for an additional year; economists say that this is one of the most effective ways to help boost the economy.
-- Finally, and particularly important for New York City, the bill includes the so-called “doc fix” which prevents a scheduled 27% cut in payments to doctors under Medicare for a year.
On the downside, the across-the-board sequester cuts were only delayed for two months because the surgical budget cuts required to avert the sequester were not made. And the limit on federal borrowing, called the “debt ceiling,” was not extended as part of the package. So it’s possible that this kind of ideological standoff will happen all over again, in the new 113th Congress being sworn in tomorrow.
The truly bad news out of the last hours of the 112th Congress was that the $60 billion aid package passed by the Senate and sent to the House las Friday died without a floor vote.
This is a real outrage-- there’s just no other word to describe it.
The first aid package, of $62 billion, to victims of Hurricane Katrina was passed within two weeks of that storm. Hurricanes Gustav and Ike recovery packages were passed within a month. And those storms were not the size or intensity of Sandy.
It’s now nine weeks and no Federal Sandy aid has passed. I spoke out on the House floor this morning against this unconscionable delay. You can view my remarks here: https://youtu.be/mTHHzBunW5I In those remarks, I call for the very first bill introduced in the new Congress tomorrow be a $60 billion aid package for areas hit by Sandy. I’m hopeful we can get some disaster aid flowing shortly.
I will work with my colleagues from the Northeast-- on both sides of the aisle-- day and night until we get this done, and I will keep you advised of our progress.
All the best in the new year.
Carolyn B. Maloney
Member of Congress