DeFazio Sets Standard For Liberal Acceptance Of Tax Cuts
The Senate has passed legislation reflecting Barack Obama’s deal with Republicans to pass a package of tax adjustments that includes tax cuts for billionaires. That doesn’t mean that President Obama can now sign the legislation into law. The House of Representatives needs to pass a similar piece of legislation too, before it can even reach the President’s desk.
Many House Democrats, including Speaker of the House Nancy Pelosi, have expressed reservations about passing such legislation. They don’t like the legislation that the Senate has passed at all. What would they vote for?
Representative Pete Defazio gave a speech yesterday in which he set the standards for liberal acceptance of tax cut legislation:
- Lower the estate tax exemption from its current level of tax-free inheritance of estates up to 10 million dollars in value.
- No tax cuts for income over $250,000 (though people earning over $250,000 would still have large tax savings on their income up to $250,00)
- Reduced or eliminated capital gains tax reduction
- No tax holiday for money going into the Social Security trust fund
DeFazio shares Senator Tom Harkin‘s belief that the temporary reduction in payments to the Social Security trust fund is part of a plan by Republicans to begin the dismantlement of Social Security benefits. He warns:
We are going to give a tax holiday of 2 percent on Social Security. Isn’t that great? It goes to any income level. That means Members of Congress will get a minimum of a $2,100 tax break, as will other people who do very well in this country.
But, don’t worry, that that would kind of hurt Social Security, to cut its income by $111 billion next year. It would accelerate the point at which it couldn’t pay benefits. But, don’t worry, we will borrow the money from China, and we will inject it into the Social Security trust fund, tearing down the firewall between the general fund and Social Security.
Next year the Republicans are going to say to the President, Hey, you can’t let that tax cut for working people, that FICA holiday, expire. And, oh, by the way, we can’t afford to subsidize Social Security anymore out of the general fund.
This is a trap, and that kind of a tax cut is not going to put people back to work.”
