Arkansas’ two U.S. Senators voted for a tax package that could avoid deep spending cuts and large tax increases threatened by the so-called fiscal cliff. However, the package is opposed by some key Democratic and Republican House leaders.
U.S. Sen. Mark Pryor, D-Ark., said the “bipartisan” agreement avoids tax increases on “hard-working families.”
“Last night the Senate passed a package on a bipartisan basis to prevent tax increases on middle-class Americans, create a permanent AMT patch, fix the estate tax to give Arkansas small businesses and family farms the certainty they need, and provide critical tax credits for hard-working families,” Pryor said in a statement. (See Pryor’s complete statement at the end of this story.)
But the deal, if approved by the House during votes that could happen today (Jan. 1) or Wednesday, does not extend the payroll tax cut. For those earning around $30,000 a year, the payroll tax will increase by about $50 per month.
U.S. Sen. John Boozman, R-Ark., said the deal retains almost 90% of tax cuts approved during the term of President George W. Bush.
“I am proud that we were able to come to an agreement to prevent the largest tax hike in American history. This bipartisan solution tackles the financial troubles our country is facing while avoiding tax increases for Arkansas families and small businesses,” Boozman said in his statement. (See Boozman’s complete statement at the end of this story.)
WHITE HOUSE DETAILS
According to a “Fact Sheet” from the Obama Administration, the deal will raise $620 billion in revenue “by achieving the President’s goal of asking the wealthiest 2 percent of Americans to pay more while protecting 98 percent of families and 97 percent of small businesses from any income tax increase.”
The White House also claims the deal will build upon $1.7 trillion in deficit reduction packages approved in the past 12 months.
“This tax agreement not only further reduces the deficit, but raises $620 in new revenue from high-income households. Together with a strengthening economy these steps will bring down the deficit as a share of the economy over the next five years,” noted the White House statement.
Provisions of the Senate-approved deal include the following provisions.
• The top tax rate on household income above $450,000 rise from 35% to 39.6%. The new top rate is the rate prior to tax reductions approved in 2001 and 2003.
• Taxes paid on large inheritances – over $5 million per individual – rise from 35% to 40%.
• Unemployment benefits are extended another 12 months for an estimated 2 million Americans.
• A planned 27% reduction in payments to Medicare doctors is removed.
• Approval of a five-year extension of several tax credits primarily available for low- and middle-income earners – for example, the child tax credit and college tuition tax credits.
• Several tax credits for businesses – R&D credit, production credits, etc. – are extended through 2013.
The Senate deal was approved 89 to 8, and was opposed by three Democrats and five Republicans.
The deal, according to the White House, also postpones the sequester provision – which calls for deep defense cuts – for two months.
“This will give Congress time to work on a balanced plan to end the sequester permanently through a combination of additional revenue and spending cuts in a balanced manner,” noted the White House statement.
POSSIBLE HOUSE OPPOSITION
But the Senate deal is reportedly receiving a cold shoulder among Democratic and Republican leaders in the U.S. House.
“If there’s no spending cuts in it, that’s going to be a problem for me,” Rep. Mick Mulvaney, R-S.C., said in a Roll Call report. “For those of us who are interested in cutting spending, it looks like there is nothing in the bill for us and that will make it very difficult to support the bill.”
Roll Call reported that U.S. Rep. Tom Harkin, D-Iowa, spoke out against the deal and was leaning toward opposing the Senate deal. The Roll Call report suggested that other Democrats may “swallow the bitter pill” delivered by the White House.
U.S. Rep. Steve Womack, R-Rogers, said prior to a 5:15 p.m. (EST) Republican conference that he might provide comment on the Senate deal when the conference ends.
STATEMENT FROM U.S. SEN. MARK PRYOR
I’m pleased Senate Democrats and Republicans were able to prevent our country from going over the fiscal cliff. Last night the Senate passed a package on a bipartisan basis to prevent tax increases on middle-class Americans, create a permanent AMT patch, fix the estate tax to give Arkansas small businesses and family farms the certainty they need, and provide critical tax credits for hard-working families. That being said, I know some may not agree with all the details of this plan. But that’s the art of compromise and consensus building, and I hope we see more of it as Congress works to improve our economy.
STATEMENT FROM U.S. SEN. JOHN BOOZMAN
“I am proud that we were able to come to an agreement to prevent the largest tax hike in American history. This bipartisan solution tackles the financial troubles our country is facing while avoiding tax increases for Arkansas families and small businesses. However, there is no reason we should wait until the last minute to address these important policy decisions. We need to provide certainty for families and job creators. I am ready in the next Congress to continue to address the need to get Washington’s spending under control and this starts with sound financial planning and passing a budget in the Senate.”
The City Wire Staff
Latest posts by The City Wire Staff (see all)
- Arkansas Home Sales Up 7% In July, Year-To-Date Sales Up 5.6% - August 29, 2014
- July Employment Numbers Send Mixed Signals In Central Arkansas - August 28, 2014
- Workforce Grows Slightly In NE Arkansas, Jobless Rate At 6.1% - August 28, 2014