Schwartz lauds passage of ‘fiscal cliff’ bill in Washington
Legislation passed by the Senate and House to keep the country from going over the so-called “fiscal cliff” of tax hikes and extensive spending cuts was lauded by U.S. Rep. Allyson Schwartz Wednesday as a bipartisan effort to avoid “fiscal and economic harm” and provide “a fairer tax policy.”
The American Taxpayer Relief Act of 2012, passed first by the Senate and Tuesday by the House, raises taxes for individuals earning more than $400,000 a year and $450,000 for couples, while protecting middle class individuals and families from tax increases.
Social Security payroll taxes will rise 2 percent, back to the previous 6.2 percent on income up to $113,000, and unemployment benefits will be extended for 2 million Americans, under the bill, according to news sources.
Congress failed to address the automatic, across-the-board spending cuts scheduled to go into effect Jan. 1 by delaying the cuts for two months, according to various news sources. The lawmakers now have un- til the end of February to work out a deal to avoid the $24 billion in spending cuts.
“We were able to pass major legislation in a bipartisan way, though at the 11th hour,” Schwartz said during a Wednesday afternoon press conference, noting it “does ask the wealthiest 1 percent of Americans to pay a bit more.”
According to Schwartz, 99 percent of individual taxpayers and 98 percent of businesses in the country will see no increase in their tax rate. The bill eliminates the alternative minimum tax on 26 million middle class Americans.
The legislation provides “certainty and stability” in tax rates, which she said was “very important” to small and medium-sized businesses.
“Having consumers know what taxes they will pay is extremely important to predict consumer demand,” Schwartz said.
The threshold for increasing taxes — some Republicans were against any tax increases and some were willing to increase taxes only on those making $1 million or more — was a major obstacle, Schwartz said, and “was still very controversial last night.”
But 85 Republicans in the House voted for its passage, she said, and the entire Pennsylvania delegation, both Republicans and Democrats, voted for the bill.
In answer to a question, Schwartz acknowledged Congress did not take advantage of “an opportunity to do something bigger in tackling the deficit,” and said “going forward, we have to look at tax policy and provisions and deductions that are no longer necessary” or need to be changed to reduce the deficit.
“Bringing in a little more revenue is important if we’re serious about debt reduction,” she said.
And, while the sus- tainable growth rate, a formula that determines Medicare reimbursements to physicians, was temporarily delayed through 2013, keeping a 26.5 percent reduction in Medicare payments at bay, Schwartz said she would work for full repeal of the SGR and “replace it with a better payment system.”
Repeal of the SGR would be part of a broader discussion to ensure solvency of the Medicare Trust Fund, she said.
“To sustain Medicare, we have to make it as cost-effective as we can,” Schwartz said, part of which is to change the way physicians are paid.