Rep. Lois Capps, D-Santa Barbara, on Tuesday slammed the refusal of the House of Representatives Republican leadership to bring bipartisan Senate legislation to extend the middle-class payroll tax cut to the House floor for an up or down vote.
Without extension of the tax cuts set to expire at year’s end, 160 million Americans, including 17 million Californians, will see their taxes go up on Jan. 1.
Capps also co-sponsored the bipartisan Senate compromise legislation, introduced by House Democrats on Tuesday. The Senate compromise bill was agreed to by 89 senators, including 39 Republicans and the entire Republican leadership in the Senate, and President Barack Obama. Five Republican senators have urged House Republicans to pass the bipartisan agreement and put an end to the brinkmanship.
“I am deeply dismayed that House Republican leadership refused to allow even an up or down vote on the bipartisan compromise bill to extend the middle-class payroll tax cut and extended unemployment insurance, and to fix the Medicare physician payment formula,” Capps said. “It’s past time the interests of the American people are put ahead of partisan posturing and brinksmanship.
“Extending the payroll tax cut and emergency unemployment benefits are the right things to do for families on the Central Coast, and the right things to do for our economy. And ensuring that Central Coast doctors are properly reimbursed for the services they provide to Medicare beneficiaries is essential to making sure seniors get the health care they need. The two-month compromise negotiated by Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell is not ideal, but it would ensure that 160 million working Americans don’t have their taxes increased in the new year, and that is so important in these tough times.”
Extending and expanding the payroll tax cut from 2 percent to 3.1 percent for 2012, as President Obama has proposed, would provide an extra $1,550 to every American family. This would add up to $21 billion in the pockets of 17 million Californians. If the payroll tax is allowed to expire the average American family will instead pay $1,000 more in taxes next year. A leading nonpartisan economic firm, Macroeconomic Advisers, estimates that letting the payroll tax cut expire could cost the economy 400,000 jobs by the end of next year.
If the House fails to extend emergency unemployment benefits, 356,900 Californians would lose their benefits, significantly more than any other state. Currently, the federal government provides funding for unemployment benefits for those who have been unemployed and looking for work for more than 26 weeks, up to 99 weeks. The expiration of extended emergency unemployment benefits would cut off benefits for all Californians at 26 weeks. Already, there have been more than 569,000 unemployed Californians who have run out of all benefits, up to the 99 week limit.
Extending unemployment benefits is widely acknowledged to be beneficial not just for the unemployed and their families, but for the economy as a whole. According to Moodys.com chief economist Mark Zandi, every dollar in unemployment benefits creates at least $1.63 in economic activity as recipients spend all of their benefits to pay for housing, food, and transportation.
Since 1959, the government has never allowed emergency unemployment benefits to expire when the national unemployment rate is still above 7.2 percent. Currently, the unemployment rate in the United States is 9 percent. The unemployment rate in California is 11.2 percent. The rate in San Luis Obispo County is 9.3 percent, 8.6 percent in Santa Barbara County and 9.8 percent in Ventura County.
Fixing the flawed Medicare physician payment formula would prevent a scheduled 27 percent cut in the fees Central Coast doctors are paid for the services they provide to Medicare beneficiaries. The House of Representatives previously passed a permanent fix of the Medicare physician payment formula in the Affordable Care Act, which Capps supported.
— Ashley Schapitl is press secretary for Rep. Lois Capps, D-Santa Barbara.