On New Year’s Day, I joined 256 members of Congress – both Democrats and Republicans – to approve a compromise agreement that avoided a major tax increase on most Americans. The bill is not perfect – compromises never are. But, after reading the 157-page bill and considering its effects on our community and nation, it was clear that this compromise was the most viable approach to keep income taxes low for the middle class and produce the jobs our country badly needs.
Here is what the agreement, the Taxpayer Relief Act of 2012, means to our community and our nation:
• The Agreement avoids a major income tax increase on most Americans. Ninety eight percent of American families – those with incomes of less than $450,000 a year – will see no increase in their income taxes.
• The Agreement continues tax cuts for college tuition, working parents with young children, and clean energy jobs like those that would result from the windmill project planned off the coast of Atlantic City.
• The Agreement will reduce the deficit through modestly higher taxes on incomes over $450,000 and estates over $10 million per couple, and through spending cuts. Instead of the fiscal cliff’s across-the-board cuts that would cost jobs in defense, transportation, health care and other industries, we adopted more reasonable and well thought-out spending reductions. These reductions will be specified prior to extending our debt ceiling, which should occur in the next sixty days.
I believe we should have made these cuts and extended the debt ceiling now, but I understand our obligation to follow through on this part of the compromise. We must never put our country in a position where we cannot pay our bills and honor our obligations.
• The Agreement helps small businesses create more jobs by extending a provision that lets these businesses more quickly deduct the cost of new equipment they buy. Quicker deductions make small businesses more likely to buy more software, store fixtures, vans and other equipment, which in turn creates more jobs.
• The Agreement extends unemployment benefits for people who are looking for work but cannot find it.
• The Agreement cancels an unwise cut in Medicare payments to doctors and hospitals, so that seniors and the disabled will continue to be able to see their doctors. Had these cuts not been cancelled, South Jersey’s largest employers – our hospitals – would have been severely burdened.
• The Agreement does not touch Social Security, Veterans or Federal or Railroad retiree benefits and strengthens Social Security by resuming full collection of the FICA tax after a two year temporary reduction.
• The Agreement avoids a huge threatened increase in the price of milk and other dairy products by continuing the present law that regulates milk and dairy prices.
Much more needs to be done to create an environment in which businesses large and small will create jobs. As more people go to work and incomes rise, the deficit will drop, and our country will stand stronger in the long run. This compromise represents a step in the right direction toward more jobs and a stronger country, which is why I joined Members from both parties to support it.