If you’re like a lot of MPA members, you have been following the debate about the repeal of the Bush tax cuts, wondering about the timeline for a decision on this issue and considering what the extension of tax cuts for America’s wealthiest individuals could mean for everyday Mainers. The answer is that the decisions will be made soon and the effects hould be huge.
First, you may be wondering about the recent talk of a “fiscal cliff” that the nation is facing later this year. The “fiscal cliff” is a dramatic term used to describe the simultaneous enactment or expiration of half a dozen federal spending and tax policies at the stroke of midnight this New Year’s Eve.
The tax policy changes range from small tweaks to large shifts and they include possible expiration of Bush era income tax cuts that mostly benefit America’s wealthiest households.
The major spending change under consideration is the so-called “sequester” of hundreds of billions of dollars’ worth of across-the-board spending on domestic and military programs. These indiscriminate, automatic cuts were built into a preliminary deficit-reduction deal the Democrats and Republicans struck last summer - the idea was to threaten programs dear to each party in order to force a final compromise. Not surprisingly these days, the idea didn’t work: even after Democrats agreed to a trillion dollars in spending cuts, Republicans refused to consider even a dime more in revenues. The debt talks collapsed; the proposed cuts that were only meant to be a threat are now a looming reality.
The path that veers away from the fiscal cliff is a “grand bargain”: a tax and spending deal that reduces federal debt in a balanced way, increasing revenues while protecting important public investments. As so often in the past, Maine’s two senators, Susan Collins and Olympia Snowe will be the keys to any compromise.
Our Senators frequently tout their “moderate” approach to deeply partisan issues; they’ll get their chance to exhibit that moderation in a “lame duck” session of Congress which will be called to address the budget crisis after the fall elections but before the swearing in of the next Congress. That means recently defeated and retiring members (such as Senator Snowe) will be able to participate in the proceedings.
Encouragingly, Senator Collins has already broken ranks with her party on this issue, on a vote earlier this year to extend the Bush income-tax cuts. Collins was the only Republican to vote against extending the cuts, including the high-end ones. Unfortunately, she also voted against extending the cuts for the struggling middle class.
MPA is making sure both Snowe and Collins know their constituents want the senators to be leaders in forging a sensible compromise and ensuring that the nation’s wealthiest pay their fair share in taxes. MPA members have sent in postcards, called the senators’ offices, and written letters to the editor in all Maine’s daily newspapers.
Add your voice to the effort. Contact their offices today and tell them you want Senators Snowe and Collins to support extending tax cuts for the 98 percent of American families making less than $250,000 a year, while allowing cuts on the wealthiest 2 percent to expire. Such a compromise would raise hundreds of billions of dollars for debt reduction and investment in middle and working class programs like Medicare, Medicaid and education.
Even if such a deal is struck at year’s end, there will of course still be plenty of work to do to make our tax and spending policies more rational and compassionate—and to make sure everyone pays their fair share. We’ll keep you posted on ways to make your voice heard, and you find out more about the national campaign at www.americansfortaxfairness.org.