Late last night, one-third of House GOP members voted with the Democrats to pass legislation avoiding the “Fiscal Cliff”. Congressman Bass voted in favor of the bill; Congressman Guinta voted against it.
Even though the Senate had passed the bill almost unanimously, until dinnertime, it looked like the bill would fail in the House. What happened at dinnertime? The House took up a brand-new bill bashing federal employees and attempting to rescind their 0.5% cost-of-living increase, which is scheduled to go into effect at the end of March. [Federal employees have already supplied $108 billion in “budget savings” through a two-year pay freeze and increased retirement contributions.]
Sure, there were only a few hours left for Congressional action. Sure, there was no chance whatsoever that a brand-new bill would become law. The House still took 90 minutes to debate it and hold a roll call vote. [Both Guinta and Bass voted for the bill. Please remember that, if either of them run again for Congress in 2014.]
And after that last symbolic attack on federal employees, GOP House leadership was finally able to get around to the business of avoiding the Fiscal Cliff. Gotta wonder about their priorities.
When it finally passed at 11:00 last night, the Fiscal Cliff bill was a true compromise. It included concessions that angered people on both sides. (Read the bill here.)
But it also set up yet another Congress-created crisis, scheduled to hit in only two months.
- The bill did not address the federal debt limit – and two months from now, the Treasury will have exhausted the debt limit “headroom” created by taking “extraordinary measures” with government and postal employee pension funds.
- The bill did not resolve “sequestration” spending cuts – but rather postponed them for two months.
So, the nation is rolling straight from one Congress-created crisis into another Congress-created crisis.
Gotta wonder why Congress keeps creating crises. (Journalist Naomi Klein has an interesting theory about how crises – real or perceived – are used to further corporate goals. Read more here.)
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One of many things the Fiscal Cliff bill didn’t address was restoring the state share of federal estate taxes.
In a “sponge tax” system dating back to 1924, estate tax revenues were historically shared between the states and the federal government. Back in 2001, Congress federalized the states’ portion of these revenues to help pay for the “temporary” Bush tax cuts.
Restoring the “sponge tax” system could mean more than $3 billion in annual revenues for state governments. New Hampshire could receive an estimated $27 million in annual revenues. Read more here.
The estate tax has a long and patriotic history. It was created to raise funds for the country’s first Navy, and was used to fund almost every war before Iraq. Read more here.
But for the past few decades, “members of a handful of super-wealthy families have quietly helped finance and coordinate a massive campaign to repeal the estate tax. …The families also have helped finance outside groups that have spent millions on fear-mongering ad campaigns intended to sway public opinion against the estate tax.” Read more here.
Who knows? Maybe restoring these state revenues will be a part of whatever bill resolves this next Congress-created crisis.
