I rise in reluctant opposition to H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act.
Two weeks ago, I voted for a better bill, the Middle Class Tax Relief Act, which passed the House but was not taken up by the Senate. That bill would have extended tax cuts for middle class taxpayers, including about 323,000 lower- and middle-income families in my congressional district who make less than $200,000 (under $250,000 for joint filers).
The bill that is on the floor today extends the 2001 and 2003 tax cuts to the wealthiest Americans in the top two income tax brackets at a cost of $61 billion. Under this bill, the millionaires and billionaires can sleep soundly, secure in the knowledge that their tax cuts will continue for at least another two years, while the unemployed get relief for only 13 months. Economists predict that many millions will continue to be unemployed beyond the 13 months.
This deal is weighted so heavily toward the richest few that the unemployed only receive 7 percent of the total package. We must fight for a better deal.
But my biggest concern has to do with a threat to the solvency of Social Security contained in the legislation. The so-called "payroll tax holiday" in H.R. 4853 raids the Social Security Trust Fund. Anyone who cares about Social Security should be scared by this. This provision reduces the Social Security payroll tax and self-employment tax by two percentage points in 2011. Payroll taxes provide dedicated funding for the Social Security Trust Fund, which is completely separate from the General Fund. Under this bill, these Social Security funds will be repaid by $112 billion from the General Fund. But this "one-time" infusion from the General Fund puts us on a slippery slope. While this payroll tax holiday expires in one year, there is a serious question as to whether expiration will occur. We can expect a bill to extend this payroll tax holiday because any other outcome would be characterized as a tax increase. A permanent decrease in the Social Security payroll tax will put the Social Security Trust Fund in jeopardy. Republicans will be one step closer to their stated goal of privatizing and dismantling Social Security's safety net. If we want to put more money in the hands of families, we could look at cutting a check for families from the General Fund, but weakening the funding source for Social Security is too risky.
In Hawaii, Social Security benefits serve as a lifeline for 220,000 seniors, disabled people, and dependents. Thousands of my constituents have urged me to preserve Social Security, and I have consistently acted to do so. Earlier this year, I spoke on the House floor in support of preserving this bedrock promise to our nation's seniors and fighting Republicans' plans to privatize or reduce benefits. I also signed a letter to the Fiscal Commission urging that any plans to reduce the deficit make no cuts to Social Security or change the retirement age.
This bill truly is a raw deal for American seniors. One of my constituents in Hilo calls the proposal a "bomb of a cut to Social Security taxes." A majority of Americans oppose cutting Social Security payroll funding and are willing to pay more so that they can be assured that they will get benefits when they retire or become disabled. I don't make pledges lightly, but I pledge that I will vote to return dedicated Social Security payroll tax funding should it be brought up for a vote next year.
Further, this legislation gives an estate tax giveaway to 6,600 families in our country, giving them each an average additional tax cut of more than $1.5 million. According to the Tax Policy Center, the new tax would affect the smallest number of estates in any year since 1934. This tax giveaway to the richest families in the country will cost us more than $68 billion, adding to our deficit without creating jobs or strengthening our economy.
The Levin/Pomeroy Amendment makes the bill a bit fairer by taxing estates at the 2009 rate of 45 percent and covering estates over $3.5 million, not the $5 million in the Senate bill. This amendment would save $23 billion. Extending estate tax relief for two years at the 2009 rate provides Americans with some certainty for estate planning in a way that is much more reasonable and fair than that proposed by the Senate bill.
The key components of this bill that I strongly support include the extension of tax cuts for the middle class and the extension of unemployment insurance for Americans who lost their jobs because of this difficult economy. In addition to my recent vote on extending tax cuts for the middle class, I voted to extend unemployment benefits seven times this year alone.
We've had numerous opportunities to extend the tax cuts for the middle class and extend unemployment benefits. The majority of Republicans voted against these proposals time and again.
On balance, I cannot in good conscience vote for this bill in its present form. The $858 billion price tag and true cost of the bill--tax cuts for the wealthiest Americans and the impact of the "payroll tax holiday" on Social Security--far outweigh the benefits. This bill is blackmail, holding the unemployed and middle class hostage to give a special deal to the millionaires and billionaires. We must fight for a better deal.
I urge my colleagues to oppose this legislation unless we are able to vote on a bill that genuinely helps the working families that we are here to represent.