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Congress Passes Tax Cuts for Middle Class

by Gregory King  |  January 03, 2013

Compromise legislation Congress passed on New Year’s Day will make tax cuts for the middle class permanent, continue unemployment assistance for the long-term unemployed, extend critical tax credits for working families, and delay for two months the massive across-the-board spending cuts – known as sequestration – in military and domestic programs. 

The bipartisan agreement will bring in $620 billion in new revenues, while offering an economic lifeline to the vast majority of working and unemployed Americans and their families.

The compromise wasn’t perfect. Additional new revenue could have been raised had Clinton-era tax rates returned for everyone making more than $250,000. And, as AFSCME Pres. Lee Saunders notes, the compromise “sets the stage for major battles over spending cuts in the months ahead.” 

Looming in the next two months is the need to extend the federal debt ceiling which tea party Republicans have pledged to use as a new opportunity to extract further cuts in spending

Programs such as Medicare, Medicaid and Social Security are still at grave risk.

“In the weeks ahead, we must remain vigilant,” Saunders says. “Republican leaders in Congress have vowed to continue their demands for deep, drastic cuts to vital services that protect our communities – including funds for public schools, public safety, transportation, scientific research and college loans. They have made it clear that cuts in programs for veterans, seniors, students and low-income citizens will all be on the table. We must do everything in our power to protect these lifeline services.”

There are alternatives to unnecessary, reckless cuts. Billions of dollars can be saved, for example, through reforms that would not directly affect benefits and programs that Americans rely upon. Allowing Medicare to negotiate lower drug prices is one example. Special interest tax loopholes that benefit the wealthy and corporations need to be eliminated before the earned benefits of seniors on Social Security and Medicare are cut. AFSCME also supports a close review of the bloated Defense Department budget

“Moving forward we will intensify our efforts to engage our leaders and activists in these battles,” Saunders says. “We will continue to press Congress and President Obama to focus on job creation, which is the best way to stimulate our economy.”

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