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Idaho delegation weighs in on fiscal cliff deal

January 2, 2013
Idaho's First District U.S. Congressional delegation issued statements regarding the passage New Years Day of a deal to stave off a looming fiscal crises, and while the statements differ, all agree the deal leaves a lot of work to be done.

The deal, finalized Monday night by Vice-President Joe Biden and Senate Minority Leader Mitch McConnell on New Year's Eve, passed the Senate Tuesday morning by a vote of 89-9, the passed the House that evening, 257-167.

Idaho Senators Mike Crapo and Jim Risch issued this joint statement after voting to support compromise “fiscal cliff” legislation.

"The compromise that we supported protects 99-percent of all Idahoans from a tax increase and also protects the vast majority of our farm families from a permanent tax increase. This is a victory for working Idahoans, but we must now be very aggressive in finding appropriate spending reductions."

But Congressman Raul Labrador, who voted against the measure in the House, called it "worse than no deal at all."

“Like I have been saying for months, bills that pass during lame duck sessions are not good for the country," his statement reads. "This was a difficult vote, but as far as I am concerned, the Biden-McConnell deal is worse than no deal at all. It temporarily ends the debate but does nothing to solve the problems that our country faces—in fact, it is a perfect example of why our country is $16 trillion in debt. The deal does nothing to address out of control spending and delays the only meaningful cuts Congress has been able to pass in the last two years.

"The president campaigned on a promise of a balanced approach -- $2.50 in spending cuts for every dollar of tax increases. Today's deal does not even accomplish that goal. The problems that have brought us to the edge of this ‘fiscal cliff’ can never be fixed with revenues alone. Both parties must rein in out-of-control spending. Today, I’m not sure either party is serious about reducing our debt and deficits.

"Families across the country have had to learn how to do more with less but Washington has not been willing to do the same. Both parties and the president need to put partisan politics and tactics aside and actually make meaningful decisions that will fix our fiscal mess.”

According to Forbes Magazine, the key features of the bill are:

-- For American families with income more than $450,000 and individuals making more than $400,000, tax rates increase to Clinton Administration levels. Below those wage levels, income taxes will remain unchanged. (Basically, 98% of Bush Tax Cuts will become permanent. Under the Bush Administration, the breaks expired after a decade.)

-- The wealthiest, those making $450,000/$400,000, will pay 20% on capital gains and dividends. Everyone else will pay 15%. Estate tax will be 40% for the wealthy.

-- Several tax breaks for middle class and lower income Americans are extended for five years: the Earned Income Tax Credit, the Child Tax Credit and the American Opportunity Tax Credit.

-- Several deductions used by wealthier Americans will be re-imposed: the Personal Exemption Phase-out will be at $250,000 and the itemized deduction limitation, the so-called Pease provision, kicks in at $300,000.

-- The Alternative Minimum Tax will be adjusted for inflation.

-- Medicare cuts will not happen. Temporary business tax breaks will exist for another year, as will federal benefits for those unemployed longer than 26 weeks.

-- A nine-month farm bill will avoid milk doubling in price.

-- Raises taxes on 77% of Americans. The average wage earner bringing in $30,000 a year will pay an additional $50 per month in federal taxes. Mostly this is because the payroll tax holiday expires.

-- The Congressional pay raise that had earlier been agreed upon will not happen.

According to the Congressional Budget Office, the bill will add $4 trillion to the U.S. deficit over the next decade; that's a four followed by 12 zeroes. Tax increases will raise around $600 billion over the next decade; that's six followed by 11 zeroes.

To simplify the equation and put it on terms most citizens are better familiar with, you can remove 10 of the zeroes and put it on a household scale. Over a period of ten years, debt will increase by $400. Wages will go up by $60.

That is a disparity of $340, which is a pretty big number when you put all the zeroes back on. The federal government, apparently, is at the top of the debt collection "no call" list.

In remarks after the passage, President Barack Obama lauded the bipartisan effort to reach an accord and he is expected to sign the bill into law in the next few days.

“Everybody worked very hard on this,” he said. “Under this law 98% of Americans, and 97% of small businesses will not see their income taxes go up.”
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