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More talk of falling off the fiscal cliff

November 28, 2012

By Laurie Young, Task Force Director of Aging and Economic Security 

President Obama spoke today about the need for a balanced approach to reducing the national debt. Task Force Director of Aging and Economic Security Laurie Young was in attendance at the White House.

Earlier today, the Task Force attended President Obama’s event that called for a balanced approach to reducing the national debt with a combination of tax increases and cuts to federal spending.

While Washington, D.C., has known that the “fiscal cliff” was approaching for the entire year, it’s just been talked about at length in the media over the past few weeks. Essentially, the “fiscal cliff” is a point in time (Dec. 31, 2012) when there will be an automatic increase in taxes that ALL Americans pay at same time the federal government will decrease how much it spends on nearly everything, including defense and human services.

Negotiations are getting off the ground between the White House and Congress on how to deal with the fiscal cliff. There are significant differences between what the White House wants and what leaders in the House of Representatives want to happen.

Those differences need to be worked out before the end of the year to avoid the cliff. The plan now is to use the “lame-duck” session of Congress to address the differences on spending and enhanced revenue to back away from the “fiscal cliff.” We will all go over this metaphorical cliff unless Congress and the White House come to an agreement before the end of the year. If they don’t, then we’ll see an automatic rise in the taxes we pay at the same time the federal government cuts back on how much it spends (taking money out of the economy).

The tax increases and spending cuts will have dreadful consequences for all Americans, but will have a particularly acute impact on LGBT people and their families.

Because LGBT people have poorer health, lower income, and fewer resources generally to protect against economic hardship any cuts to federal programs serving marginalized communities.

To highlight this, the National Gay and Lesbian Task Force and the Center for American Progress, along with 23 other organizations, released a report last week titled “Caught in the Budget Battle: How the ‘Fiscal Showdown’ Impacts Gay and Transgender Americans.” This report shows how these cuts will particularly affect LGBT people and their families in a range of areas.

Our report calls for a balanced and fair approach to the “fiscal cliff” that protects vital funding for programs and services. If there is no solution in sight, it calls for a short-term delay to keep the cuts from occurring at the end of the year.  This will delay the cuts, and give a newly elected Congress the chance to craft a reasonable solution that protects marginalized communities that benefit from federal programs.

In contrast, the “Fix-the-Debt Campaign” supports what they call a “strong, bipartisan fiscal plan with a framework similar to Simpson-Bowles.”

The “Fix-the-Debt Campaign” is really a coalition of corporations calling for continued tax cuts benefiting the wealthiest in our country on the backs of middle and low-income families. Its supporters say this plan would cut waste on low priorities in domestic and defense spending; slow the growth of Medicare and Medicaid; reform Social Security to make it financially sound; and includes “pro-growth and deficit-reducing tax reform.”

However, it does not adequately address our country’s immediate need for jobs or protect the middle-class and the most vulnerable, including LGBT people and families and those who are people of color, from harmful debt reduction proposals that would slash the very programs designed to help these communities. Finally, it does not ensure a balanced approach to debt reduction that raises sufficient revenue. That is because it’s not really focused on increasing revenue through taxes.  Debt reduction is their goal but they speak primarily of budget cuts to important programs.

These are some of the cuts they recommend: subsidized student loans; freeze federal worker wage increases for two more years; and cut 250,000 federal non-defense contractor jobs by 2015.

They would require the Smithsonian Museum to start collecting entrance fees and raise the current fees at national parks. They recommend creating a committee to eliminate unnecessary programs by $11 billion by 2015. There are specific cuts to the State Department that would directly impact our relationships with other countries and the United Nations. These are but a few of the recommended cuts.

At the event this morning, President Obama repeated his call for a balanced and fair approach to reducing the debt and raising taxes on only income over $250,000, or the highest 2% of wage earners in America.  He asked for people to “tweet” their members of Congress with the hashtag #my2k and tell their members what they will do with the average $2,000 savings from his plan.

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