After weeks of intense negotiations, legislators averted the so-called “fiscal cliff” by finally reaching a budget deal with an overwhelming 89 – 9 vote. President Obama signed the agreement on Jan. 2 that will restore more tax fairness and delay or cancel harmful cuts to services.
Highlights of the budget deal:
- Restores more tax fairness by raising rates on the wealthy to 39.6 percent for individuals making more than $400,000 and couples making more than $450,000.
- Payroll tax for middle class workers is back to 6.2 percent, up two percentage points from the tax holiday we enjoyed the last two years.
- Raises approximately $600 billion in needed revenue for services.
- Postpones for 2 months $109 billion in across-the-board cuts that would have been harmful to state budgets. We continue to advocate for eliminating these cuts.
- Avoids serious cuts to health care and Medicaid.
- Extends jobless benefits for the long-term unemployed for one year.
- Extends Earned Income and Child Tax Credits for five years.
“This agreement is a bold step in the right direction to protect working families and restore more tax fairness in America. In this new year, we must continue to urge our elected leaders to avoid the politics of painful cuts and focus on creating good jobs, protecting our services, and reviving our economy.”
Gwyn Harshaw, Local 521 President