There is more financial work for members of Congress to do, even with this week’s deal to avoid the so called fiscal cliff at the start of 2013.
The $16.4 trillion debt ceiling will have to be addressed next month, along with the sequester, the automatic $110 billion in spending cuts that were supposed to take effect on January first, but were delayed.
“We keep spending money we don’t have,” said First District Congressman David McKinley, a Republican, said on Wednesday’s MetroNews Talkline.
“We’re borrowing 43 cents on every dollar and we continue to do that.” He says he voted against the compromise plan that passed the U.S. House of Representatives on Tuesday because it included $620 billion in new revenues with only $15 billion in spending cuts.
“That’s not the way we’re supposed to be operating here. We’ve got to get this debt under control,” Congressman McKinley said.
Second District Congresswoman Shelley Moore Capito, a Republican, was also a ‘no’ vote because of the limited amount of spending cuts included in it.
“When the bill came out, my mouth just dropped open and I’m thinking to myself, ‘Have we not learned that we cannot keep spending money that we don’t have for future generations?'” she said.
“I have voted (in the past) to extend the tax rates. I believe in that, but we have got to get ahold of the spending.”
Third District Congressman Nick Rahall cast one of the 257 ‘yes’ votes for the bill in the U.S. House on Tuesday.
“I think it’s a step in the right direction,” he said on Wednesday’s MetroNews Talkline. “It’s a compromise that will grow our economy, that will protect the middle class, that will continue to provide jobs for our people.”
In total, the legislation will raise roughly $600 billion in new revenues over a decade. It includes the following provisions:
– The tax rate for people making more than $400,000 will rise from 35% to almost 40%.
– Itemized deductions will be capped for individuals making $250,000 annually and for couples making $300,000 each year.
– The estate tax rate will rise to 40%.
– Child care, tuition and research and development tax credits will be renewed.
– Unemployment insurance will be extended for one year.
– The alternative minimum tax will be permanently adjusted for inflation.
If no deal had been reached, tax rates would have gone up for everyone this week. At the same time, the across the board automatic federal spending cuts would have taken effect on January 1st.
Previous: The looming fiscal cliff which Americans have heard so much about in recent weeks, has apparently been averted in Congress. The U.S. House of Representatives late Tuesday night approved the Senate Version of the agreement.
The vote was 257-167. Enough Republicans signed onto the agreement, fearful any attempt to retool the measure and send it back to the Senate would be dead on arrival. President Obama hailed the measure saying it raises taxes only the top 2% of wage earners in America and avoids a tax hike for the middle class.
Some Republicans aren’t so sure. Furthermore, some in the House were miffed the agreement does nothing to trim government spending.
West Virginia First District Representative David McKinley was among those who went against House Speaker John Boehner and opposed the deal.
“Simply put, the Senate version of the bill raises taxes, increases spending and only promises potential spending cuts in the future,” said Rep. McKinley in a press release following the vote. “It failed to address our long-term debt problem and is anything but the balanced approach promised by President Obama. America is now more than $16 trillion in debt. And Congress has failed in the past to cut spending that it promised the public.”
Republican Congresswoman Shelley Moore Capito also voted against the deal. Democrat Third District Congressman Nick Rahall voted in favor of the measure.
UPDATE–New Year’s Day Both West Virginia U.S. senators Jay Rockefeller and Joe Manchin voted in favor of a bill early New Year’s morning that keeps the U.S. economy from going over the fiscal cliff, but the measure faces an uphill battle in the U.S. House.
The vote, which came at about 2am Tuesday, would raise taxes on some wealthy Americans but keep tax cuts in place for the middle class. Observers say the bill does little to reign in the nation’s debt.
In a prepared statement following the vote Rockefeller said the Senate had done the right thing by “preventing a tax increase on the middle class; requiring the very wealthy to start paying their fair share; providing financial certainty for individuals, families, and businesses; and giving the nation a bipartisan compromise solution that moves us past the fiscal cliff. Tomorrow, House Republicans need to step up to the plate and join us in supporting middle class and working families in West Virginia and across America. House Republicans should allow a straight up or down vote on the bipartisan Senate deal, with no ducking and no gimmicks, and make clear to the American people whose side they’re on.”
Rockefeller went on to say the bill is far from perfect.
Manchin also issued a statement following his “yes” vote:
“This is not the ‘big fix’ I want, but it’s the best we can do at this late hour. First thing tomorrow, though, I will start working again on making this a better deal for the people of West Virginia and this great country. The fact is, this deal is the flawed product of a broken process that puts politics ahead of people. And it sets up for more dangerous political gamesmanship in the months ahead. But the bottom line is this last-minute deal guarantees that the paychecks of middle class Americans won’t take a big hit from higher taxes on New Year’s Day, and it protects 99 percent of all West Virginians.”
The U.S. House is scheduled to go in session Tuesday at noon.
Even though the deadline for a deal passed when 2012 ended at midnight Tuesday, Congress can agree to a bill retroactively.
PREVIOUS The start of the Year 2013 will mean higher taxes and across the board federal spending cuts in areas of education and defense among others.
Even though Vice President Joe Biden was still working with U.S. Senate leaders on ways to avoid the so called “fiscal cliff” on Monday night, the U.S. House of Representatives was scheduled to end the day’s work without a vote on any plan.
Earlier on Monday, President Barack Obama said a deal was “in sight,” but not finalized, on possible ways to keep the tax increases for everyone and across the board spending cuts from taking effect automatically with the start of the New Year.
“It’s a Band-Aid on a gaping wound,” Second District Congresswoman Shelley Moore Capito said of a possible plan on Monday’s MetroNews Talkline.
“It’s not enough to figure out how to sustain the promises that we’ve made to generations to move forward.”
U.S. Senator Joe Manchin was also predicting a short term fix.
“We’re not talking about a grand bargain here,” he said on MetroNews Talkline as well. “At this point and this time and at the 11th hour, they’re just thinking a deal would help suppress the markets from going in a very unfavorable direction.”
Even a short term plan, though, will need approval from both the U.S. Senate and U.S. House to take effect and that was looking highly unlikely, according to reports out of Washington, D.C. early on Monday evening.
That means new tax rates and large scale federal spending cuts will kick in, as scheduled, on Tuesday.
Reports on negotiations Monday indicated progress, with Democrats agreeing to raise the threshold for tax increases to $450,000 in family income and $400,000 for individuals. Rates would stay the same for people making less than those amounts each year.
There were also indications the sequester, automatic spending cuts scheduled to take effect if other cuts were not made, could be delayed for several months or even a year or two.
Congresswoman Capito says, regardless of the outcome of talks, the issues should not have been pushed to the last day of 2012. “Everybody knows that you don’t make your best decisions when your back is up against the wall,” Congresswoman Capito said.
“If you’ve done proper planning, which we’ve known this is coming, we’ve been here since the middle of November, since after the election. We could have avoided all of this hand wringing.”
The U.S. House could opt to vote on any agreement on Tuesday.