The agreement passed by the Senate last night is a breakthrough in beginning to restore tax fairness and achieves some key goals of working families. It does not cut Social Security, Medicare or Medicaid benefits. It raises over $700 billion over 10 years, including interest savings, by ending the Bush income tax cuts for families making over $450,000 a year. And in recognition of the continuing jobs crisis, it extends unemployment benefits for a year. A strong message from voters and a relentless echo from grassroots activists over the last six weeks helped get us this far.
But lawmakers should have listened even better. The deal extends the Bush tax cuts for families earning between $250,000 and $450,000 a year and makes permanent Bush estate tax cuts exempting estates valued up to $5 million from any tax. These concessions amount to over $200 billion in additional tax cuts for the 2%.
And because of Republican hostage taking, the deal simply postpones the $1.2 trillion sequester for only two months and does not address the debt ceiling, setting the stage for more fiscal blackmail at the expense of the middle class.
Instead of moving to address our nation’s real jobs and public investment crisis, our leaders will be debating a prolonged artificial fiscal crisis. In the weeks to come, as the confrontation over the economic direction of our country continues, the working men and women of the AFL-CIO will continue to fight to keep poor and middle class families from giving more so rich people can continue paying less. That means a fairer, more progressive tax system, an end to Bush tax rates for the 2% and protection of Social Security, Medicare and Medicaid from benefit cuts.