June 9, 2010
Will Republicans Stand Up For Families And Seniors…In Their Own States?
The tax extenders bill currently being debated on the Senate floor creates jobs, cuts taxes for small businesses and families and provides much needed assistance to workers affected by the recession. A critical part of the bill also helps cash-strapped states as they seek to balance their budgets and assist individuals enrolled in Medicaid. Republicans need to decide if they will help Democrats pass this bill or continue to stand with Washington special interests over families and seniors in their own states.
STATES SEE ALARMING RISE IN MEDICAID ROLLS
Medicaid Enrollment Rose by Over 3 Million People Between June 2008 and June 2009. “Medicaid enrollment rose by 3.3 million people, or 7.5%, from June 2008 and June 2009, new data from the non-partisan Kaiser Family Foundation shows. Enrollments rose in every state for the first time since the early 1990s. On average, Medicaid makes up 21% of state budgets, equal to education. Medicaid serves the nation’s poorest children, some parents, pregnant women, people with disabilities and seniors in nursing homes. States must provide basic benefits for people who earn up to the federal poverty level of $22,050 for a family of four. They aren’t threatened by the cuts. States have added people at higher incomes and optional benefits, which are now at risk.” [USA Today, 2/19/10]
Ø Medicaid Has Seen a 21 Percent Increase in Enrollment Over the Last Three Years. “Medicaid, which covers more than 60 million people nationwide, is one of the costliest services states provide. It ate up about 21% of state spending in fiscal 2009, according to a recent report by the National Governors Association and National Association of State Budget Officers. The Great Recession sent even more Americans onto the Medicaid rolls, growing by an estimated 21% over three years. At the same time, state tax revenues plummeted, forcing governors and legislators to make deep budget cuts. To help states cope with this double-disaster, the Obama administration increased the federal share of Medicaid payments by $87 billion as part of last year’s massive stimulus program. States are prevented from tightening eligibility requirements in order to cut costs.” [CNN Money, 6/8/10]
Opposition to Increased Medicaid Funding Could Cause States to Raise Taxes or Cut Budgets. “The aid, worth a total of $25 billion, amounts to nearly one-quarter of the collective budget deficits states face for the fiscal year that begins on July 1 in most states. To balance their budgets, states would have to raise taxes or cut their budgets by that much.” [McClatchy, 5/11/10]
MAJORITY OF STATES HAVE ENORMOUS BUDGET SHORTFALLS
States All Across the Country Are Seeing Millions If Not Billions in Budget Shortfalls. According to the Center for Budget and Policy Priorities, many states, including those represented by Republican leaders in the Senate, saw enormous budget gaps in 2010. For instance, Kentucky and Arizona saw a $1.2 billion and $1.9 billion mid-year budget gap. [Center for Budget and Policy Priorities]
Ø Large Public Sector Job Cuts Are Hindering the Nation’s Recovery. New federal data shows “states, localities, and school districts have cut 231,000 jobs since 2008, including 22,000 jobs in May alone. Such cuts slowed the pace of economic growth in the first quarter of 2010 by one-half of one percentage point.” [Center for Budget and Policy Priorities, 6/8/10]
Stabenow, Reed Discuss Democratic Efforts To Cut Taxes For Small Businesses And Create Jobs
Washington, DC— Senate Finance Committee member Debbie Stabenow (D-MI) and Senator Jack Reed (D-RI) held a press conference this morning to discuss Democratic efforts to pass legislation that would close loopholes that reward companies for outsourcing American jobs, and give over $18 billion in tax cuts to families and small businesses to strengthen our economy and create jobs. Democrats are urging Republicans to support this bill and stand with the middle class, not special interests.
“American businesses need immediate assistance to make new investments here at home and create jobs,” said Senator Stabenow. “The jobs bill we have before us will provide billions in tax cuts and support for small businesses across the country to hire new employees while closing loopholes that reward big corporations for outsourcing American jobs. This legislation will also provide additional tax cuts for middle-class families and a long-overdue extension of unemployment insurance for struggling households. I call on my Republican colleagues to stop protecting corporate interests and support this jobs bill so we can put Americans back to work.”
“This bill will provide tax cuts to help businesses create jobs while providing additional relief to families hit hardest by the recession,” said Senator Reed. “We have made significant progress in reversing the huge number of jobs losses under the Bush Administration, which was hemorrhaging 750,000 jobs a month. That is positive, but we have to keep the pedal to the metal, and this bill does that.”
The bill includes several key tax cuts for families and businesses, including:
- Property Tax Deduction – This bill extends the additional standard deduction for state and local property taxes to save families money on their federal tax returns. This deduction, created by Finance Committee Chairman Max Baucus (D-Mont.) in 2008, allows taxpayers who do not itemize their tax deductions to receive property tax relief as a standard deduction of $500 for single filers and $1,000 for joint filers.
- Tax Cut for College Tuition – This bill extends a tax deduction for qualified education expenses including college tuition and fees, so Americans can get the world-class education they deserve without going bankrupt in the process.
- Research and Development Tax Credit – The bill extends a tax cut for research and development to help American businesses spur innovation and grow.
- Tax Credit for Equipment Investments – The legislation allows companies to receive tax refunds on a portion of their Alternative Minimum Tax (AMT) credits if they invest in capital equipment for use in the United States.
- Tax Benefits for Capital Investments – The legislation extends a tax cut to allow restaurant owners to depreciate new construction and improvements and retail store owners to depreciate improvements over 15 years rather than 39.5 years, supporting construction jobs, encouraging economic development and saving these businesses money they can use to reinvest in their companies and hire new workers.