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|December 4, 2012|
President Proposes Crucial Revenue Increase and Republicans Counter
With just a few short weeks until the end of the year, the President and the Republican Leadership in the House of Representatives are working to strike a deal to avoid the “fiscal cliff” and prevent numerous tax and spending changes from taking effect. Last week, President Obama set forth a proposal that would (among other things) defer the sequester, raise $1.6 trillion in revenue by allowing the Bush-era tax cuts to expire for the wealthiest Americans, save $400 billion through entitlement cuts, extend the improvements in unemployment insurance and the payroll tax credit for one year, and add $50 billion in stimulus spending in 2013. The President made clear that any deal must include a resolution of the upcoming debt ceiling situation.
On Monday, House Speaker Boehner countered the President’s offer with a deficit reduction framework including $800 billion in revenue increases from closing loopholes and deductions (lowering tax rates for the wealthiest Americans rather than raising them), $600 billion in health care cuts to programs like Medicaid and Medicare, and $600 billion in additional unidentified cuts to discretionary and mandatory spending. The proposal did not address the debt limit. This proposal does not begin to meet CDF’s Budget Principles and the proposed cuts to discretionary and mandatory spending are a direct threat to children.
Reaching a deal before the end of the year would keep the nation from “going off the fiscal cliff”. There are those who argue that the economy would suffer if a deal is not reached before January; others argue that no deal is better than a bad deal and that there could be advantages of going over the cliff. One advantage, government revenue would automatically rise when the Bush-era tax cuts expire in 2013 without bipartisan action.
CDF’s bottom line for children in any deal is that it must protect children and low income families from cuts; invest in children to create jobs and promote economic growth for the nation; and ensure the most advantaged Americans and corporations pay their fair share.
Check back often, as we’re closely monitoring proposals to address the fiscal cliff and their effect on children and low-income families, and click here to view past Children's Budget Watch updates.