The House of Representatives is now scheduled to take two votes late Thursday that together hand hundreds of billions of dollars to the wealthiest among us while raising taxes on working families with children and students, slashing $250 billion in nutrition aid, Medicaid, and other services for the poor, and abandoning the long-term unemployed. These choices are a dismaying backwards step and should be rejected.
- Let income tax rates rise on incomes over $1 million, but protect loopholes and estate tax breaks that overwhelmingly favor millionaires: The Boehner amendment (so-called "Plan B") gets no new revenue on income between $250,000 and $1 million, ends limits on tax breaks, even for those with the highest incomes, and keeps the current extremely low tax on multi-million dollar estates. This will provide millionaires with an average tax cut of $50,000 a year, and will provide $1 million to the 3 in 1,000 wealthiest estates. By leaving rates low on income between $250,000 and $1 million, the House will vote to lose $400 billion in revenue, 70 percent of which will go to households with incomes over $1 million. By failing to make the estate tax more fair, the House will lose another $120 billion.
- Increase taxes on working families with children and students: The Boehner amendment ends improvements to the Earned Income Tax Credit and Child Tax Credit that help low-income working families. This means 12 million families benefiting from the Child Tax Credit will see their taxes go up by $800, on average. Six million families will pay an average $500 tax increase because the House cuts the EITC. Families struggling to pay for their children's college costs will lose $1,100 because the House ends the American Opportunity Tax Credit.
- Slash spending on vital services: The House will return to legislation it passed last spring to replace one year of cuts to the Pentagon and many domestic services scheduled to start in January with ten years of deep cuts, which were rightly rejected by the Senate and the Obama Administration. These include hastening cuts to SNAP/food stamps that would cost at least $8 - $10 per person per month, reducing benefits back down to $1.30 per meal. They will also deny SNAP to 2 million people who now get benefits because their low incomes qualify them for programs such as Temporary Assistance for Needy Families. This change will also result in 280,000 low-income children losing free school meals. The House will also be asked to vote to slash health care premium subsidies under the Affordable Care Act for 350,000 people, and cut Medicaid funding to Puerto Rico and other territories even though Puerto Rico, despite its disproportionate poverty, receives far lower federal Medicaid payments than any state (a high of 35 percent in 2010; states receive no less than 50 percent of Medicaid costs). The amendment also allows states to make cuts in their Medicaid programs below the levels in place when the Affordable Care Act passed, which could reduce eligibility or benefits for millions of people. Among other mean-spirited cuts, the amendment would totally eliminate the $1.7 billion Social Services Block Grant, denying funding to protect children and seniors from abuse or neglect, for meals on wheels for seniors, for child care and foster care, and many other services. And on top of the other cuts to the Child Tax Credit, millions of immigrant working families with incomes averaging $21,000 will lose it altogether, costing them about $1,800.
Voting for these two amendments is a clear choice to increase hardships for low- and moderate- income people while providing hundreds of billions to the people at the very top.
But it gets worse. At the end of this year, the federal unemployment insurance program for the long-term jobless will expire, leaving 2 million unemployed people to go without unemployment benefits abruptly right after Christmas, and hundreds of thousands more losing that help in the following few months. The House does nothing to spare them, even though 4 in 10 of today's jobless have been out of work more than six months.
The votes the House are scheduled to take late Thursday are a harmful distraction. Instead, the House and Senate should hurry up and adopt a plan to increase taxes on the top 2 percent and multi-million dollar estates, protect Medicaid and Medicare beneficiaries, and invest in infrastructure to create jobs. Congress should get rid of the cuts now planned for domestic appropriations such as education, Head Start, housing, child care, child nutrition (WIC), and so much more - such programs are already projected to be cut by about $1.5 trillion over the next decade. Congress and the Administration can and should find additional savings in the Pentagon, and should reject cuts to Social Security and a host of low-income programs that will occur if inflation adjustments are reduced.
We need leadership - to protect low-income and vulnerable people, not make them worse off, and to keep the economy moving, not stalled because millions of people have less to spend. Please vote against the wrong-headed amendments on Thursday, and get to work on something that will help.