The Virginian-Pilot
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South Hampton Roads' congressional delegation has sharp differences over the tax-cut deal negotiated between President Barack Obama and Republican lawmakers.
U.S. Sen. Jim Webb, a Democrat, praised the plan, calling the continuation of the Bush administration tax cuts, a one-year cut in Social Security taxes and an extension of unemployment benefits the "ultimate stimulus plan."
"It will put more money directly into the pockets of people and small businesses, allowing that money to be quickly recycled as the economy expands," Webb said in a statement Wednesday. "It will provide greater certainty for business and investment planning and extend several programs that effectively serve working Americans and lower-income families."
U.S. Rep. Randy Forbes, R-Chesapeake, also supports the plan, saying, "It's the best we can do." Forbes, who has been a strong critic of many of Obama's policies, praised the president for the compromise.
However, U.S. Rep. Bobby Scott, D-Newport News, said keeping the tax cuts intact continues "the reckless fiscal course" of the Bush administration that was the "primary culprit of our current fiscal crisis."
Scott has consistently said he doesn't want to extend the Bush tax cuts because they will increase the deficit by $3.7 trillion over the next 10 years. Ending the tax cuts would bring in enough revenue to balance federal spending within four years, he said.
The Obama/GOP compromise plan, announced this week, is being considered by the House and Senate during the last weeks of their two-year session. If legislators fail to act before the end of 2010, some tax cuts, including $1,000-per-child tax credits and lower-income tax rates, will expire.
Republicans and some Democrats have argued that the Bush administration tax cuts on income, inheritances and businesses should be given to everyone, while others, predominantly Democrats, have argued that wealthier Americans making more than $250,000 a year should no longer get the tax breaks.
The new compromise, which would keep the Bush tax cuts intact for everyone for two years, would cost $900 billion.
U.S. Sen. Mark Warner, a Democrat, is leaning toward supporting the plan but said he hopes to add some language to the legislation that more specifically addresses how to reduce the federal deficit.
"To kind of do this in isolation without some kind of linkage to real long-term significant deficit reduction... I'm not sure that's a recipe for longer-term fiscal health," Warner said during a Fox News interview this week.
Warner's spokesman, Kevin Hall, said Wednesday that Warner "wants to be supportive of the bipartisan compromise, and he is working now to see if there might be a way to link this package to the longer-term goals of the bipartisan deficit commission."
Forbes predicts that major cuts in federal spending will begin in 2011 when a new Congress convenes with a Republican majority in charge of the House. Democrats will remain in control of the Senate.
"Come January, I think there's no question you're going to have to be cutting government," Forbes said, adding that Congress won't regain any credibility with the public until it begins to cut spending.
The office of U.S. Rep. Glenn Nye, R-Virginia Beach, did not respond to requests for comment.
Bill Bartel, (757) 446-2398, bill.bartel@pilotonline.com
THE DETAILS
If the the tax-cut deal is approved by both houses of Congress, you’re bound to see more money in your wallet, whatever your income.
Here’s a look at key elements of the compromise.
PAYROLL TAX
The government takes 6.2 percent out of your pay for Social Security. That would drop to 4.2 percent in 2011. That means more take-home pay. For instance, if you make $50,000 a year, you would pay $1,000 less. If you get paid every other week at that salary, that’s roughly $40 more in your paycheck starting in January.
ESTATE TAX
For the past 12 months, you didn’t pay any taxes if a family member died. In 2011 the estate tax would have jumped to 55 percent of the value of an estate after the first $1 million. Now it would be 35 percent of the value after the first $5 million.
CHILD TAX CREDIT
Good news if you’re a parent: The $1,000 child tax credit is being extended for two years. Taxpayers with income of less than $75,000 – or $110,000 for married couples filing jointly – qualify for the full amount.
CAPITAL GAINS AND DIVIDENDS
Current tax rates on long-term capital gains would remain in place for two years. The tax applies to profits from the sales of assets, such as stocks, held more than a year. The highest rate of 15 percent had been expected to rise to 20 percent next year.
TUITION TAX CREDIT
Families with children in college can benefit from a tax credit for tuition and fees. A maximum of $2,500 would remain in place for two years.
From The Associated Press
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I don't think it's going to work
You know which side I mean is obsessed, inflexible, and completely venomous about soaking the people make the most money and parading that position around as something compassionate and honorable. More and more people, who will personally never have that problem, are now starting to understand this is just vote seeking unwarranted persecution of success. When the smoke clears, I think Americans will vote for fairness instead of envy.
Never Agrees
Rep. Bobby Scott will never agree to any compromise or bill that makes good sense. He only wants to give away billions and the only way to continue that requires using every penny he can squeeze from the rest of us! I am thankful that he is no longer my Representative!
House Dems Reject Plan
If libs truly think the Bush tax cuts over the years were a mistake as Bobby Scott and Anthony Weiner assert, then they should break until the new Congress assembles. We can wait until the new Congress with a Repub majority is seated. We'll take some hits in the paycheck for few weeks as tax rates revert, and they will hurt, but it'll be changed ultimately. There is simply NO reason for Dems to have sat on their collective rear ends all year and only now try to fix the tax rates with two weeks left. They don't even have a budget which was due on 1 October. So I can wait until the new Congress is seated.
"Aye, the haggis is in the fire now for sure." Montgomery (Scotty) Scott
Bobby Scott is worried about deficit speending
You've go to be kidding me.
Seems like people are still
Seems like people are still drinking the Republican kool aid. Obama shouldn't have succumb to this blackmail. I dont hear any of you right wing haters on here saying how unamerican it was to state that the Republicans would not vote on anything until they got what they wanted. Absolutely disgusting is the only way to describe the Republicans. My neighbor cant get an extension of unemployment unless tax cuts are enacted. Gosh and we wonder why Michelle Obama made her comment about finally being proud of her country.
Face it folks
Taking my money, and yours, and spending it in ways that keep them in power, hence "career", is what congress does. Some ways are good, some bad. Up until now, we turned a blind eye as to how they spend. A normal tendency anytime there is a feeling of "being broke" which is where we will soon be as a country.
Hey, the sky is falling.
taxpayers
Those who don't pay income tax or are elected by those who don't have no problem raising them because it is other people money. The Bush tax cuts didn't cause the recession it was giving home loans to people who should never have qualified for them based on income and credit history so we could expand home ownership beyond those who could afford it. Those people are now losing the homes they never should have owned and we are all paying for it.
Bush tax cuts
I seem to remember how Pres. Bush was bragging about the the high percentage of home ownership. He encouraged it in fact.
The mechanism for this was the wall street push into unregulated financial instuments that no one understood and the hands off attitude of regulators during the Bush era.
We started 2 unpaid for wars, pushed an unpaid for prescription drug plan, and cut revenue at the same time. It was the "voodoo" economics that his father had decribed the Reagan plan before he became his VP.
Also, don't forget about $4.00 a gallon gas allowed by the oil men in the WH.
Now we want to do the same thing again and expect a different result. We want to reduce revenue, replace infrastructure, keep our schools & military strong.
nice try
Was President Bush bragging about how people who could not afford the loans being given loans or that people were getting into homes?
How was WW1 and WW2 and Korean War and Vietnam War and Bosnia action or any of the other military actions paid? For WW1 and WW2 the term "war bonds" was how.
And the really short $4/gallon time was right before the 2008 presidential election - do you really think that those "oil men in the WH" would want to give another reason not to vote for the party in the WH? Isn't there an oil speculator in England being investigated for triggering the huge spike that occurred and then suddenly went away.
Come on - what profit did the short term spike of oil over the long term effect was there for the "oil men"?
"War Bonds"
Treasury bonds are used the finance many other things besides war. The point is that the wars were not in the budget and not counted against the revenue coming in. Otherwise, what sense would it make to reduce taxes while the expense of war was increasing the need for revenue.
The fact that bank underwriters approved poor loans have and are now paying for it is the problem. People may have been able to pay for their homes while they were working, but cannot when laid off.
Bush took credit for the housing boom when it was happening and hets blamed for the results.