UCC minister says tax breaks important step toward fairness
Written by Anthony Moujaes
January 3, 2013

Congress went down to the wire, forging a last minute deal that avoided sending the United States over the fiscal cliff, and potentially into a recession. Though there's much work still to do on the budget, the New Year's Day agreement is a good step for the country, says Edith Rasell, the United Church of Christ’s minister for economic justice, because it averted the fiscal cliff without endangering the poor.

The issue is far from over, with debates about cuts to safety net programs and a balanced budget on the horizon.

"It is a very important step toward a federal budget that promotes greater fairness and opportunities for all," Rasell said. "I urge people of faith to continue to follow the budget debates and be in touch with their representatives over the next few months as Congress considers the across-the-board spending cuts and raising the debt ceiling."

The bill extends some tax breaks to middle-class Americans permanently, and also raises taxes for the wealthiest households ($400,000 for individuals, $450,000 for families), something Rasell says will bring in sorely needed federal revenue by placing the burden of these taxes on the people who have benefited the most from the economic growth of recent years, not on the poor. The measure also extends unemployment benefits for one year.

Said Rasell, "[This was] a very needed and important decision since 40 percent of the unemployed (more than 4 million workers) have been out of work for over 6 months."

Congress postponed consideration of spending cuts until the end of February, at which time it must reconsider raising the debt ceiling. The payroll tax break expired and was not renewed, which means all American workers will pay about 2 percent more in taxes.

The deal was reached in the late hours New Year’s Day with House approval (267-167). The bill got through the Senate (89-9) in the very early hours the same day. It staves off the dangerous combination of several expiring tax cuts and automatic reductions in defense and non-defense spending, set to kick in on Jan. 1, which would have likely thrown the U.S. economy into another recession.

Rasell points to spending issues that will resurface in the future. She hopes for a more thoughtful approach to reduce excessive spending, while striking a balance between military and non-military spending.

"Military spending must be cut and spending for safety net programs and core government functions must be maintained," Rasell said. "The long-term fiscal deficit is driven by high and rising health care costs in both public programs and private health insurance. Addressing the cost of the nation’s health care system is a necessary prerequisite for budgetary health."

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Mr. Anthony Moujaes
UC News Coordinator
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moujaesa@ucc.org

Ms. Connie N. Larkman
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