Tax cut deal: “A tremendous sacrifice” says Solis

The Obama administration pressed hard this week for passage of its framework on unemployment compensation and tax cuts. Just a day after former President Clinton endorsed the measure, Labor Secretary Hilda Solis, on a telephone press conference Monday, Dec. 13, added, “This week President Obama provided the American people a true act of leadership.”

“By the President’s own account, the agreement is not perfect,” Sec. Solis continued. “Forging compromises, as you know, isn’t easy, but it’s what the American people are counting on us to do.”

“Right now we’ve made a tremendous sacrifice,” she said. “There’s no pleasure in us giving the high income tax bracket these cuts. But we know we wouldn’t have been able to get what we need for the unemployed and middle class families.”

A recent Washington Post/ABC poll revealed broad support for the President’s tax compromise with about seven in 10 expressing support. A majority of Democrats supported the deal even though they also expressed opposition to extending the Bush tax cuts for the rich.

With an overwhelming majority of 83-17, the U.S. Senate, Dec. 14, agreed to close debate on a framework negotiated by President Obama to maintain the Bush-era tax cuts for two years in order to extend unemployment compensation for another 13 months.

Despite a nearly 9-hour filibuster by Sen. Bernie Sanders, I-Vt., that body  moved forward with the bill, and passed the measure.

Senate Democrats argued in favor of extending the middle income tax cuts and extending the unemployment benefits.

Republicans, however, used Senate filibuster rules to block a bill on middle-income taxes and have refused to even consider extending unemployment benefits.

Only after President Obama brought these measures together in his framework did the Republicans allow any legislation to move forward in the Senate.

House Democrats registered their opposition to the framework in a caucus meeting earlier in the week, with a majority urging improvements to it.

Majority Leader Steny Hoyer, D-Md., told reporters that many of his colleagues are most opposed to a restoration of the estate tax, which had expired this year, to lower levels.

“There’s much consternation in the House about the estate tax. I expect there to be some consideration of that,” Hoyer told McClatchy Newspapers.

The Congressional Black Caucus has also indicated it would push for unemployment extensions for people who have been jobless for more than 99 weeks in addition to the provisions in the President’s framework.

Rep. Shelley Berkley, D-Nev., who has expressed support for the framework, had previously introduced a bill to extend unemployment benefits an additional 20 weeks for people out of work for more than 99 weeks.

Labor Secretary Hilda Solis urged passage of the framework, emphasizing that a total of 2 million people will have lost their unemployment benefits by the end of the month.

“The bipartisan framework agreement on taxes undoubtedly secures vital tax relief and investments for our workers that will create jobs and accelerate economic growth,” Solis told reporters. “This plan is a smart thing for our recovery and the right thing for our nation’s most vulnerable.”

“It also ensures that millions of working5class Americans won’t see their taxes go up next year,” she said.

The framework continues important Democratic programs like the Earned Income Tax Credit, which benefits millions of individuals and working families earning under $30,000 annually, Solis added. The extension of a college tuition tax credit has also been included in the framework.

In all, the tax proposals will benefit 156 million households and has been estimated to create 3.1 million jobs over the next two years, she said.

Solis also pointed to a letter from the Social Security chief actuary who said the payroll tax cut, a provision of the framework, would have a “negligible” effect on the Social Security Trust Fund.

Opponents of this measure argue that once the payroll tax cut is put in place, it will be difficult to restore the current rate. Over time, the loss of revenue will likely harm the financial security of the trust fund.

“It would be unfortunate” if the framework failed to pass in this lame-duck session of Congress, Solis explained. If the unemployment extension does not pass, in addition to the 2 million people who will have lost their benefits by the end of the month, an additional 7 million could lose theirs in January.

“This certainly isn’t an end all,” Solis said. “We need to do more.”

Image: Hilda Solis in foreground // Department of Labor


Joel Wendland-Liu
Joel Wendland-Liu

Joel Wendland-Liu teaches courses on diversity, intercultural competence, migration, and civil rights at Grand Valley State University in West Michigan. He is the author of The Collectivity of Life: Spaces of Social Mobility and the Individualism Myth, and a former editor of Political Affairs.