Tierney Cautions Tax Bill Is "Gateway to Future Attacks on Social Security and Middle Class Needs"

Statement

Today, Congressman John Tierney (D-MA) issued the following statement after opposing the compromise tax bill negotiated by President Obama and the Senate. President Obama is expected to sign the bill into law today.

"Only weeks ago the so-called "Deficit Commission' regaled America, with echoes from conservatives and the White House, about the projected $1 trillion dollar annual deficits and the almost $14 trillion debt it claimed was threatening the fiscal future of this nation. Nevertheless, late last night Congress voted to add almost a trillion dollars in debt in order to protect tax cuts for a small percentage of the wealthiest Americans. More troubling is the fact that this bill's mechanism for delivering the necessary middle class tax breaks can be expected to be the gateway to future attacks on Social Security and middle class needs.

"In 2001 and 2003, a Republican-led Congress passed the "Bush tax cuts' without paying for them, essentially borrowing the funds to do so. The large majority of tax cuts went to the very few Americans who were already well off. Even with a projected $5.6 trillion, 10-year budget surplus after the Clinton presidency, I joined others in arguing then that these tax cuts were poor policy. Today, almost without exception, economists of all persuasions cite the "Bush tax cuts,' along with the borrowing for two wars and an inadequate Medicare prescription drug program, as leading factors in our current fiscal crisis.

"With the national debt now more than doubled and substantial annual deficits, we should be following the advice of conservative and liberal economists: in the short run, we must stimulate our economy by supporting middle class and small business tax relief and making fiscally-smart job creation investments, while allowing tax cuts for the wealthiest Americans to expire.

"Unfortunately, Senate Republicans held hostage critical benefits for millions of unemployed Americans, the continuation of tax cuts for every American who earns up to $250,000, among other worthwhile measures in the President's proposal. They did so in order to force a continuation of the "Bush tax cuts' for amounts over $250,000 as well - essentially giving a very small percent of earners tens of billions of dollars in breaks that will be borrowed and piled onto the debt. Additionally, I strongly opposed the provisions in the bill pertaining to the estate tax. Republican Senators, and then House members, insisted that people with great wealth - just 6,600 individuals - pay no taxes on the first $10 million owned at death and then only at a rate of 35 percent for amounts over $10 million

"All together, this misguided bill added billions to our deficit in order to enrich only two to three percent of the population, and too much of that spending does nothing to create jobs or improve our economy.

"Of further concern is the mechanism used for distributing those tax breaks that are helpful to the economy. By reducing Social Security employee withholding obligations from 6.2 percent to 4.2 percent for one year, we run the very real risk that Republicans or other opponents of Social Security will argue against reinstating the withholdings to 6.2 percent when the GOP assumes control of Congress next year. The bill takes $119 billion over two years out of Social Security, and I believe there is a real danger that Republicans will later refuse to fill in that shortage from the U.S. Treasury.

"Late last night, I voted against the final bill. There were some very good provisions in it, including the extension of unemployment benefits and targeted tax relief to middle-class Americans and small businesses struggling to make ends meet, and my voting record in support of such items is clear. However, in final consideration of the tax bill as a whole, I expect it will have a negative impact on our economic security and our government's efforts to support all Americans, and it sets a negative precedent for similar compromises in the years to come."

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