Tag Archives: Senate

We’ve averted the fiscal cliff – or have we?

Passed by the Senate at a 2 am vote on January 1, 2013; passed by the house at an 11 pm vote that same night; signed into law by the President on January 2, 2013, the American Taxpayer Relief Act of 2012 is perceived as a deal struck by congress at the eleventh hour that largely eliminated the Fiscal Cliff.

Has this legislation really averted the Fiscal Cliff?

The Fiscal Cliff is the sharp decline in the budget deficit that could have occurred beginning in 2013 due to increased taxes and reduced spending as required by previously enacted laws.

But the deal to avert the Fiscal Cliff doesn’t achieve any of that. Instead, it…

A) Does not reduce the Federal Government’s budget deficit

B) Does not avoid increased taxes

C) Does not reduce spending

A) The Fiscal Cliff deal does not reduce the budget deficit.

The Congressional Budget Office (CBO) estimates the legislation to avert the Fiscal Cliff will reduce revenues and increase spending, overall adding nearly $4.0 trillion to the Government deficits over the next 10 years.

B) The Fiscal Cliff deal does not avoid increased taxes.

As a result of the deal, the Tax Policy Center, a nonpartisan Washington research group, estimates that taxes on 77.1% of U.S. households are going up in 2013.

Among the households facing higher taxes, the average increase in taxes would be $1,635, the Tax Policy Center said.

  1. The two-year old 2% cut to payroll taxes is being allowed to expire. The payroll tax, which was reduced to 4.2% in 2011 and 2012, returns to 6.2% in 2013. This is expected to take about $120 billion out of the economy, which should have a negative impact of about 0.7% on GDP growth.
  2. Marginal income and capital gains tax rates are increased for those with annual income over $400,000 for individuals and $450,000 for couples. The top income rate is going up from 35% to 39.6%. The top capital gains rate increases from 15% to 20%.
  3. A phase-out of tax deductions and credits for incomes over $250,000 for individuals and $300,000 for couples is reinstated.
  4. Estate taxes are set at 40% of the value above $5,250,000, indexed for inflation, up from 35% of the value over $5,120,000.
  5. A 2.3% tax on gross sales of medical devices (such as heart valves and hip replacement parts – a tax firms making equipment must pay even if they have no profit at all.
  6. A new 3.8% surtax on investment income (possibly including profits from the sale of a home) for individuals making more than $200,000 a year or couples with $250,000 or more.
  7. An increase of Medicare tax on wages above $200,000 for individuals and $250,000 for couples.  The current 2.9% Medicare payroll tax will be increased to a total of 3.8%.
  8. A raise in the threshold for allowed Itemized Medical Deductions from 7.5% of adjusted gross income to 10%, burdening those with the largest medical expenses by limiting how much of these costs they can deduct on their taxes.

C) The Fiscal Cliff deal does not reduce Government spending.

The budget sequestration created by the Budget Control Act of 2011 (the directed automatic across-the-board cuts totaling $110 billion per year for 10 years beginning on January 2, 2013, split evenly ($55 billion each) between defense and non-defense discretionary spending) is delayed by two months.

The American Taxpayer Relief Act of 2012 does include, however, over $67 billion in tax breaks for ‘renewable energy’, Hollywood, multinational corporations, Puerto Rico and Virgin Islands rum industry, NASCAR, plug-in electric scooters and others.

7 Months into the Federal Fiscal Year – Why is there No Budget?

The 2011 Federal fiscal year started October 1, 2010.

At that time – Democrats had a majority in Congress – both the House and the Senate.

Why haven't Democrats passed a budget resolution on time?

Rep. Charles Rangel, the senior Democrat in the House (serving since 1971) has finally shed some light on the reason why Democrats haven't passed a 2011 budget resolution before they lost control of the House in November 2010 mid-term elections:

 

You didn't WHAT?

You didn't get to it???

 

Oh! We GET IT now, Mr. Rangel, thank you!

Who Doesn’t Want Crippling Sanctions Against Iran?

More than three-quarters of the House and Senate signed letters to President Obama urging him to impose "crippling sanctions" on Iran.

The letters further urge the president to sanction Iran's Islamic Revolutionary Guard Corps, Iran's banking system, and Iran's ability to import refined petroleum.

Congress

81 Senators joined signing the Senate letter led by Senators Charles Schumer (D-NY)

and Lindsey Graham (R-SC).

Who didn't sign?

13 Democrat Senators did not sign off on this call, including:

– Harry Reid
– John Kerry
– Christopher Dodd
– Max Baucus
– Robert Byrd
– Patrick Leahy

8 Republican Senators did not sign off on this call, including:

– Orrin Hatch
– Richard Lugar
– Richard Shelby

Complete language of the Senators' letter.

List of Senate signatories.

Complete language
of the House's letter
.

List of House signatories.