Manchin hopes to 'CALM' fiscal cliff storm | The State Journal
Sen. Joe Manchin, D-W.Va., has been pushing for bipartisan compromise on the national budget since he stepped foot in the U.S. Senate chambers. But as the so-called fiscal cliff looms, Manchin is taking action.
Manchin introduced the Cliff Alleviation at the Last Minute Act, or CALM Act, Dec. 30, fewer than 36 hours before tax hikes and sequestration go into effect for 2013. Manchin's plan would alleviate the worst effects of the cliff while providing a path to a long-term solution, according to a news release.
"If we're determined to go over the cliff, we've got to do something to soften the landing because at the bottom of the fiscal cliff are immediate and massive tax increases, deep and indiscriminate spending cuts and the risk of another recession," Manchin said. "So as we come down to the final hours, we have two choices: to do nothing and cause an unbelievable amount of hardship for our fellow Americans, or do something to reduce the suffering inflicted on our citizens by an inflexible political system. I choose to do something."
The proposed legislation would do three things: first, it would phase in tax hikes over the next three years instead of allowing them to hit immediately. Five tax measures are set to expire at midnight, including the Bush tax cuts that lower rates for investments and capital gains and expand a number of tax credits, including the child tax credit. The payroll tax holiday, which decreased the percentage of taxes an individual pays per paycheck toward Social Security and Medicare, also will expire meaning workers will again pay 6.2 percent of their pay toward those programs.
"Just look at what happens to people in need if we go over the cliff and just do nothing," Manchin said in a Dec. 30 Senate floor speech. "On New Year's Day, the lowest income tax rate will jump from 10 percent back to the Clinton-era rate of 15 percent. That's a pretty big financial bite for people who are struggling right now."
Instead of experiencing that 5 percent tax hike overnight, the CALM Act would phase in increases over three years, so Americans will only bear a 1.6 percent increase in the first year.
Secondly, the bill would allow the Office of Management and Budget to prioritize which programs will be cut rather than apply across-the-board cuts known as sequestration. Sequestration is mandated by the Budget Control Act of 2011 and calls for a 7.6 percent to 9.6 percent across-the-board cut in all discretionary spending, except programs that help low-income Americans. The cuts are divided between defense and non-defense programs and experts predict sequestration could cripple affected departments and agencies.
"If OMB fails to do the job, the sequestration across-the-board cuts kick back in," Manchin said in the floor speech. "Of course, the final word rests with Congress. OMB's decisions can be overridden by a joint resolution."
The CALM Act also would encourage Congress and President Barack Obama to reach the "big fix" that economists have called for to improve the nation's fiscal well-being. Manchin is a vocal supporter of the Simpson-Bowles plan, but he said he recognizes that such a comprehensive plan may not be feasible in the eleventh hour.
"True, from the very beginning I have favored a comprehensive solution to put our fiscal house in order, something along the lines of the Bowles-Simpson plan," Manchin said in the floor speech. "We don't have that luxury now. But perhaps the CALM Act will not only soften the blow of the fiscal cliff, but also give us a sense of urgency about a grand bargain to repair our fiscal house."
Manchin said Congress is acting irresponsibly and should put aside political bickering and reach a compromise before it's too late.
"Something has gone terribly wrong when the biggest threat to the American economy is the American Congress," he said.
By: Whitney Burdette
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