Peering over the fiscal cliff
Lawmakers weigh in on the consequences and solutions to the looming deadline on January 1All eyes are on Capitol Hill as bipartisan efforts on both sides of the aisle strive to come up with alternatives that will save Americans from going over the “fiscal cliff.”
The fiscal cliff refers to a number of changes in current law that are poised to strike in January, unless Congress comes up with some solutions.
“The combination of tax hikes and arbitrary spending cuts to important domestic and defense priorities could, according to the independent Congressional Budget Office, push our economy back into a recession,” commented Congressman Greg Walden earlier this week.
He added that if Congress doesn’t act, taxes will go up an average of $3,205 per tax return in Oregon, according to one study. Another study found that hundreds of thousands of American jobs — including 8,800 in Oregon — will be lost.
“He believes that we must come together to find common ground to stop our government from going over the fiscal cliff, and to begin to solve the federal government’s budget crisis with our fiscal house in order,” commented spokesman for Walden’s office, Andrew Malcomb.
He went on to say that going over the fiscal cliff would be disastrous for Oregon families and Oregon’s economy.
“With Oregon’s unemployment rate stubbornly stuck above the national average, Oregon families can’t afford another recession, higher unemployment, or higher taxes,” said Walden.
Some key tax breaks that are due to expire this tax year include President Barack Obama’s payroll tax holiday, which would involve an increase of payments to Social Security, and the expiration of tax breaks that were enacted in the 2009 economic stimulus package by President Obama. Included in these losses would be the credit for college tuition and the child tax credit for working families.
As the fiscal cliff looms ahead, Senator Jeff Merkley (D-Ore.) is focused on making sure that Oregonians have a strong economy and good jobs now and for our future.
“We can’t let short-term deficit reduction throw us back into recession, but we also can’t let the ongoing uncertainty around taxes and government programs linger,” noted Deputy Communications Director for Senator Merkley, Courtney Warner Crowell. “There are tough decisions ahead but if we do nothing, the effect on Oregon’s economy will be drastic.”
Crowell said that approximately $5.5 million would be cut from Head Start programs — meaning about 900 fewer children in Oregon would be served, 400 fewer Oregon students would be able to participate in work-study, and $3 million would be cut for assistance to low-income families for heating and cooling.
“And those are just the automatic spending cuts, she added. “Taxes would go up on everybody, and if the payroll tax cut expires, our economy will feel a $100 billion slow-down that will cost jobs. The list goes on. Senator Merkley believes that a key piece of any deal must include ending the special tax breaks that only go to the most well-off in our society and the loopholes for special interests like oil companies. The Senator believes we need a responsible path that doesn’t put the burden of reducing the deficit entirely on middle class families and those who are less fortunate.”
Senator Ron Wyden’s (D-Ore.) spokesperson Tom Towsley commented on Wednesday that the Senator believes the solution is to reform the tax code, and to remove all the tax credits and loopholes, and lower rates for employers and businesses.
“Everybody has been talking about reforming the tax code,” remarked Towsley. “That is certainly what Senator Wyden wants to do, and whether it going to happen between now and the end of the year is really the question. We will certainly get a good start on doing it.”