Mass. Legislators Weigh In On Avoiding ‘Fiscal Cliff’
By Corey Kane
BU News Service
WASHINGTON — With negotiations looming on ways to avoid heading over the so-called “fiscal cliff”, members of Massachusetts’ congressional delegation are declaring their priorities – and, like elsewhere around the country, the debate appears to break down along partisan lines.
In order to avoid a scenario of across-the-board tax hikes and automatic spending cuts early next year that economists warn could send the nation back into a recession, Republican Sen. Scott Brown said he would be open to revenue increases by removing tax subsidies. At a Tuesday press conference, he particularly cited the current subsidy for ethanol.
But, consistent with the position of his party’s leadership, Brown said he would not support increased tax rates. “We need to make sure that we have the ability to pay the bills and make sure businesses can stay competitive,” he said.
However, Democratic Sen. John Kerry, reflecting the stance taken by President Obama, called for a balanced approach of tax increases and spending cuts.
The tax increase side of the fiscal cliff exists because of sweeping tax rate reductions enacted in 2001, the first year of the administration of President George W. Bush. Those reductions were due to expire at the end of 2010, but were ultimately extended until the end of this year. While there is bipartisan support for extending the cuts for most Americans, there is sharp partisan disagreement over whether to keep tax rate cuts in place for the highest earners – those taking in more than $250,000 annually.
Adding to the fiscal cliff scenario is the agreement struck between Obama and Republican congressional leaders in 2011 to raise the federal debt ceiling. The compromise created a bipartisan congressional committee to come up with a plan for cutting $1.2 trillion from the deficit over 10 years. If the so-called “Supercommittee” failed to do so, automatic, across-the-board cuts would take effect in early 2013, evenly split between defense and non-defense programs.
The bipartisan panel, of which Kerry was a member, met in the fall of 2011 without agreeing on a plan to head off the automatic cuts. Kerry blames the Republicans for failure to do so.
“We came close during the Supercommittee, but the election and the ideological pressures of the Tea Party always tied the hands of reasonable Republicans,” Kerry said in a statement.
Reps. William Keating and Stephen Lynch, both D-Mass., echoed the sentiments of Obama and most congressional Democrats. Obama is scheduled to meet on the matter Friday with congressional leaders.
Keating said his focus is to ensure tax cuts remain in place for the middle class, while protecting certain programs from drastic cuts.
“My priorities are bread and butter issues,” Keating said in an interview, adding, “Making sure there’s spending for education.” He also cited programs for job training, environmental protection, infrastructure development, and public safety in funding he hopes to protect.
In a statement, Lynch declared, “We cannot continue to reduce our deficit at the expense of working families, senior citizens and the poor while refusing to even consider letting tax cuts expire for the wealthiest Americans and closing corporate loopholes.”
The Congressional Budget Office warned in August that if Congress fails to act and the automatic cuts and across-the-board tax increases occur, unemployment would rise to 9.1 percent in 2013 and the gross domestic product would shrink by 0.5 percent over the year. But, if all tax hikes and spending cuts were avoided, the CBO estimated the GDP would grow by 1.7 percent and unemployment would be at 8 percent.