The Week Just Past:  The Heartbreak of Sandy Hook

Working to Cut Spending and Prevent Huge Tax Increases

WSJ: “Teetering on the Fiscal Cliff”

FEMA Disaster Assistance Deadline Extended into 2013

The Week Just Past:  The Heartbreak of Sandy Hook

“It is now a week past the heinous murder of innocents at the Sandy Hook Elementary School in Connecticut and the horror of the attack is still almost too much to bear. 

“We all love our children more than anything.  We expect their schools to be a sanctuary away from home, never to be violated. 

“Our oldest daughter is a kindergarten teacher, with a class of twenty-five little people, full of joy and promise.  To teachers and parents alike, the thought that any child could be harmed is heartbreaking.

“Of course, we need to find out why this happened and what drove this individual to commit these unspeakable crimes. But we also need to do everything possible to make sure that something like this never happens again in another corner of America. 

“I agree with the President: these daily tragedies must end. We must search for solutions, mindful that no single law or set of rules and regulations can eliminate evil from our society.  But we must try.  All of us.

“In the meantime, Americans everywhere have come together and are praying for the families of the victims and the survivors that they may find some small measure of peace and comfort.”

Rodney Frelinghuysen

Working to Cut Spending and Prevent Huge Tax Increases

Negotiations continue between President Obama and Speaker of the House John Boehner in an effort to avoid the massive, record-breaking tax increases on every American family and business that will occur if no action is taken by New Year’s Day.  While the two sides attempt to develop bi-partisan legislation to avoid the so-called “fiscal cliff,” the House yesterday retreated from efforts to approve a measure to prevent huge tax hikes on January 1 and cut Washington spending. 

“The preferred legislative approach would contain a mixture of serious federal spending cuts and tax reform designed to close loopholes and spur jobs and the economy. This was clearly not that package – this was really Plan B,” Rodney said.  “However, in the absence of this action, every individual, family and business in America will be hit with heavy new taxes in ten days.  Earlier this year, the House acted to prevent these tax increases.  It’s now up to the Senate and the President to follow our lead.”

Here's what the House “Plan B” bill would have done:

     1.  Did not raise taxes. It is a net tax cut that would have prevented a $4.6 trillion tax hike on January 1; The package would have permanently:

     2.  extended income tax rate cuts for Americans making less than $1 million, which protects 99.81 percent of all taxpayers;

     3.  extended the current estate and gift tax ($5 million at 35 percent and indexed for inflation);

     4.  extended Section 179 expensing for small businesses ($250,000 and indexed for inflation);

     5.  stopped the Alternative Minimum Tax (AMT) from hitting more middle class families, including thousands in New Jersey;

     6.  extended parity for capital gains and dividend taxes, preventing dividend taxes from being taxed at the highest rates; and

     7.  “Plan B” did not include anything on the debt limit or other non-tax policy items. Remember, Speaker Boehner’s rule on the debt limit still applies: spending cuts must exceed any debt limit increase.

While all these provisions benefit taxpayers, point number 5 was particularly important for New Jersey residents.  Without this reform, approximately two million individuals and families will be facing higher tax burdens in 2013.

The House did approve the Spending Reduction Act of 2012 (H.R. 6684).  The bill replaces the President’s dangerous “across-the-board” national security budget cuts with common-sense spending cuts and reforms, and reduces the deficit by an additional $242 billion.

The measure focuses on stopping waste, fraud and abuse in federal programs, eliminating government slush funds (including an ObamaCare slush fund), and reducing waste and duplication in government bureaucracies. The House passed a similar bill in May, with Rodney’s support, but Senate Democrats never took action.

From The Wall Street Journal: “Teetering on the Cliff”
Boehner's tax bill failure reflects Obama's failure to negotiate seriously.

“Republicans pulled their Plan B tax bill from the House floor late Thursday, announcing that they lacked the votes to pass it and won't return to Washington until after Christmas. The White House may chortle that the GOP is in disarray, and it is, but this failure to govern also owes much to President Obama's failure to negotiate with any degree of seriousness. If Washington now goes off the tax cliff, Mr. Obama may not enjoy the plunge as much as some of his partisans believe.

“Speaker John Boehner defaulted to Plan B as a last resort after weeks of failed negotiations with the White House. First he offered to raise revenue by $800 billion through tax reform, but Mr. Obama insisted on raising tax rates. When Mr. Boehner finally cracked on raising rates, at an income threshold of $1 million, Mr. Obama still said no.

“The President also wanted more spending immediately, not less, and he offered no specific entitlement reform beyond a change in how inflation is measured in adjusting tax brackets and federal transfer payments. Oh, and he wanted the national debt limit lifted permanently.

“To put this in raw political terms, Mr. Boehner offered to break a core GOP principle on taxes and Mr. Obama offered him nothing he could take back to his rank-and-file in return. Mr. Boehner is a political leader, not a dictator, and he needs to persuade Members, not beat them into submission.

“The Speaker's miscalculation was that, just as in 2011, he thought he could get into a room with the President and negotiate a grand bargain. His intentions were good but he misjudged the all-or-nothing ideological nature of this Presidency. After the debacle of 2011, Mr. Obama could have treated the negotiations as the art of the bipartisan deal that could set the stage for immigration reform and other second-term achievements. Flush with victory, he could have at least made a gesture on entitlements.

“Instead, he has treated the talks as an extension of the election campaign, traveling around the country at rally-style events at which he berates Republicans for not accepting his terms of surrender. Grant gave Lee more at Appomattox.

“Plan B was Mr. Boehner's attempt to salvage some political dignity and a policy victory or two in return for conceding on tax rates. The bill wasn't even technically a vote to raise taxes because the rates are set to rise automatically on January 1 if Congress does nothing. The bill also kept the estate tax at 35%, rather than going up to 55% as now scheduled, and it made the tax cuts on lower incomes permanent.

“With a narrow deal on taxes, Mr. Boehner figured he could live to fight another day on spending. But it is a measure of the mistrust the President has engendered that many Republicans didn't want to give up even this much on taxes in return for nothing at all.

“The best scenario for the economy now would be for Mr. Obama to offer to extend all the tax rates for six months and start negotiating anew in January. That would give everyone the chance to decompress and back down from the barricades.

“The alternative is a de minimis deal, perhaps negotiated in the Senate, that lessened some of the tax-increase damage and then the House might follow. But that still means a big tax increase and months of trench warfare on spending. The media can revel in the GOP's woes, but the buck still stops with the President.”

Recommended Reading: The threatened year end massive tax hikes are not the only higher taxes Americans have to worry about.  The President’s new health care law contains dozens of higher levies which will NOT be stopped with any "fiscal cliff" agreement.  One of these higher taxes will be particularly harmful to New Jersey – “America’s Medicine Chest.”  Read Dr. Henry Miller’s piece in Forbes “Obamacare's Medical Device Tax Will Cost Innovation and Jobs” here.

Additional Recommended Reading: David Leonhardt, writes about the projected growth of Medicare costs and the national budget deficits in the Sunday New York Times.  Read “Foreseeing the Issues in Medicare’s Future” here.

FEMA Disaster Assistance Deadline Extended into 2013

People affected by Hurricane Sandy in New Jersey now have until January 30, 2013 to register for disaster assistance through the Federal Emergency Management Agency (FEMA).

People with storm losses in all counties can register online at www.disasterassistance.gov or via smartphone or tablet at m.fema.gov.

Survivors also can register by phone or 711/VRS by calling 800-621-3362, TTY 800-462-7585.  The toll-free telephone numbers operate 24 hours a day, seven days a week until further notice.

At the request of New Jersey officials, FEMA extended the registration deadline beyond the original 60 day window due to the magnitude of the Hurricane Sandy disaster.

The disaster registration process serves as a referral point for FEMA programs and those of partner agencies such as the U.S. Small Business Administration, American Red Cross and the Salvation Army.

FEMA disaster assistance for individuals and families can include money for rental assistance, essential home repairs, personal property losses and other serious disaster-related needs not covered by insurance.