The Naysayers: Why Blumenauer, DeFazio and Schrader Opposed Fiscal Cliff Deal
A missed opportunity for real reform that puts Medicare and Social Security at risk
By Helen Silvis Of The Skanner News
January 03, 2013After exhaustive negotiations, Congress finally passed a fiscal cliff deal. Supporters said the deal was needed to avoid across-the-board tax increases that would hurt working and middle class Americans.
It also avoided immediate sweeping cuts to the federal budget, and extended unemployment insurance.
A majority of lawmakers from both parties eventually decided those benefits outweighed the downsides of the deal. Both Oregon senators voted for the bill. In the House of Representatives, Rep. Suzanne Bonamici (D) and Rep. Greg Walden (R), voted in favor. But not everyone agreed. Reps. Blumenauer, De Fazio and Schrader voted against. So what were they thinking?
Rep. Earl Blumenauer, who is a member of the Ways and Means Committee which deals with the federal budget, told C-Span the benefits were limited and short-term, because Congress still has a fight ahead over raising the debt limit, the federal budget and entitlements.
“All we did was kick this down the road,” he said. “We didn’t address the debt ceiling, which should have been part of any major agreement. We’re going to be in the middle of that for the next two months. We’ve taken a situation where the American public were focused on the big picture and the president had leverage – and we settled for a third of the loaf, a quarter of the loaf. We didn’t really change how we do business…
“The government operations run out in March. We’ve already gone over the cliff as far as the debt ceiling is concerned. The clock is ticking and the sequestration (across-the-board federal budget cuts) was just postponed for two months.”
The bill avoided a 27 percent cut to Medicare, but should have found a permanent, not a temporary solution, Blumenauer said.
“…if you look at the details. The doc fix – is absolute lunacy. “It’s something nobody wants: to have a 27 percent cut in Medicare payments. But instead of addressing it straight on…because it’s something we have to fix every year…we’re going to torment Medicare providers for another year.
“There is a permanent patch for the alternative minimum tax, but this is a tax that needs to be permanently reformed or repealed.”
Blumenauer said he respected his colleagues work to avoid placing greater tax burden on poor and middle class people, and he agreed with extending unemployment insurance and green tax credits. But, he said the deal includes too many hidden sweeteners for individual lawmakers, provisions on a rum tax and on financing movie deals, for example.
“It institutionalizes the arm wrestling and the horse trading,” he said, “And over the course of the next few days we’re going to find a whole lot of other things that got stuffed in there by staff of various Senate offices…"
In future, everyone will want a piece of the pie, he says, making agreement even more difficult to reach.
“Much of what we are arguing about, if we cut away the clutter and try to improve government efficiency and tax fairness, is supported by the American people and could find bi-partisan support in Congress.”
Rep. Peter De Fazio has made no secret of his view that going over the fiscal cliff would have made it easier for Democrats to secure a better deal. Speaking on MSNBC in late November, he said Congress would be more moderate in 2013, and with big tax raises already in place, Republicans could vote for a moderate bill that lowered taxes for people earning under $250,000.
This week, DeFazio released a press statement that underscores the same issues Blumenauer raises.
“While the Senate plan included an extension of unemployment insurance that will save benefits for over 29,000 Oregonians and an essential ‘doc-fix’ that will continue payments to doctors who treat Medicare patients, this ‘deal’ hinders our ability to deal meaningfully with the deficit and burgeoning debt and puts in jeopardy Social Security and Medicare in the coming confrontation over the debt limit,” DeFazio says in his statement.
"Under the Senate plan, wealthy investors will pay a significantly lower rate of taxes than someone who works for a living like an army captain or a teacher, adding $280 billion over ten years to our nation’s debt. The bill also puts in place a plan that will exempt joint estates worth up to $10 million from estate taxes, adding another $370 billion over ten years to the nation’s debt. And while millionaires and billionaires will see their income above $450,000 taxed at Clinton era rates, the deal permanently extends the Bush tax cuts on all income between $250,000 and $450,000 at a cost of $107 billion over ten years.”
DeFazio said Congress is set for a huge battle over the debt ceiling and entitlements in March, when the current budget expires. And that framework will make it harder to protect Social Security and Medicare.
“This sets the stage for a massive attack on Social Security and Medicare under the guise of fiscal responsibility. Republicans are already proposing to increase the Medicare eligibility age to 67 and cut the cost of living adjustment for Social Security and veterans’ benefits.
"Middle class Americans and seniors who have earned these benefits should not be asked to shoulder the burden of a deficit caused in large part by eleven years of the Bush tax cuts, two years of the Obama tax cuts, a deep economic recession caused by reckless Wall Street gambling, two wars charged to the credit card, and unrestrained federal spending in other areas.”
Rep Kurt Schrader issued a statement that was shorter, but also called for a more comprehensive solution.
"This is yet another short-term, Band-Aid solution that has become prevalent in Washington as of late," Rep. Schrader said. "It neither tackles the largest drivers of our deficits, nor lays a framework to say we will do so in the future. I remain staunchly committed to passing a big, bold deficit reduction and jobs package that puts everything on the table, including revenue, spending cuts and entitlement reforms, puts our nation back on a fiscally sound trajectory and promotes growth and certainty for our businesses."