Talk about the Grinch who could really steal Christmas and the New Year. If Congress does not pass legislation to avert the “fiscal cliff” deadline on December 31st, Latino families of all incomes will feel the pain. For low-income families, tax credits for low-income families as well as those families paying college tuition will be cut. For single moms making minimum wage, the tax credit would be cut from almost $2,000 to less than $200. It will also mean the end of the payroll tax cut which has increased the take-home pay for over one hundred million households making a middle-income salary. Families making over $100,000 but less than $500,000 will pay more taxes than millionaires due to the alternative minimum tax. And unemployment benefits would end for more than two million people.
“Nobody wants to go over this fiscal cliff, it will damage our economy, it will hurt every taxpayer, and it will be the largest increase in history; it will affect everybody,” said Florida Republican Congresswoman Ileana Ros-Lehtinen on CNN recently. “For anyone who’s watching this who thinks ‘this isn’t going to impact me,’ you will find out it will,” added Ros-Lehtinen.
But the issue is the huge chasm between Republicans and Democrats on how to get to a budget deal. President Obama and the Democrats want to raise taxes on wealthy families along with spending cuts. Republicans do not want to raise taxes on wealthy families. “We know the problem is a lot of spending, it’s not that we’re not taxing people more,” said Ros-Lehtinen. Texas Republican Congressman Bill Flores, who is on the House Budget Committee, said in a statement, “negotiations with the president are going nowhere due to his unreasonable requests to raise revenue through tax increases without meaningful cuts in federal spending,” Congressman Flores stated.
President Obama and Democrats insist cutting programs alone will not raise enough money without increasing taxes on wealthier families. The latest proposal from President Obama is to extend tax cuts on families making families $250,000 dollars or less, along with a series of spending cuts. Democrats today are urging Republicans to pass this.
“John Boehner cares more about keeping his speakership than keeping the country on firm financial footing,” said Senate Majority Leader Harry Reid this morning, saying not reaching a deal will hurt poor people the most.
California Democratic Congressman Xavier Becerra, a member of the House Ways and Means Committee, which formulates the House’s tax laws as well as Social Security and Medicare laws, recently criticized his Congressional colleagues across the aisle.
“Once again, the American people are left watching in astonishment as House Republicans take our country to the edge,” said Congressman Becerra. “It’s time to make the tough choices. Republicans must return to the negotiating table and work with President Obama to find a bipartisan solution that protects the middle class and our economy,” he said. New Jersey Democratic Senator Robert Menendez said recently that the fiscal impasse is affecting states like New Jersey, which was severely impacted by Hurricane Sandy and is counting on federal relief. “I don’t think there’s much more that could have been thrown on our shoulders,” Menendez told Hispanic Business.
A recent NBC News/WSJ poll found a solid majority of Americans – 65 percent – favor a Congressional compromise, even if it means tax increases for the wealthy along with spending cuts. But among Latinos, says political scientist Matt Barreto, the numbers supporting both tax increases on wealthy are even higher. A Latino Decisions poll found 86 percent of Latino Democrats, 77 percent of Latino Independents, and 51 percent of Latino Republicans favor higher taxes on the wealthy instead of just spending cuts to reduce the deficit.
“Simply put, while Republicans look to make in-roads with Latinos on a softer approach to immigration, they risk alienating more than three-quarters of potential voters if they oppose tax increases on the wealthy,” stated Barreto, who also said that Latinos are “watching the GOP on the fiscal cliff – if politicians ignore this directive, they do so at their own peril in terms of securing or persuading Latino voters,” Barreto concluded.
Congresswoman Ileana Ros-Lehtinen said she was confident that both sides can “give a little” and reach a compromise. In the meantime, the clock is ticking, and the deadline is next Monday.