Tax package would help suburbs
Regina M. Calcaterra, a Democratic committeewoman in Southold Town, comments on politics and policy for Fox News and CNBC.
The tax cut and unemployment benefits package negotiated by President Barack Obama should be enacted. In fact, it's long overdue for suburban Democrats in high-cost-of-living states like New York to begin publicly stating what we have long been whispering: We need this.
Obama's package is our best hope for generating the private-sector job growth we so desperately need. The winners will be working men and women who have shouldered the brunt of this economic downturn and have been left behind by 10 years of Washington's harmful deal-making. This compromise package is exactly the political remedy Democrats need to recover in the suburbs, where half of America's voters reside.
Obama saw that the congressional Republicans only wanted to extend the tax cuts for America's super wealthy. And he realized that our economy needs an injection of tax cuts tied to the extension of unemployment benefits, to unleash the multiplier effect of both consumer spending (representing 70 percent of gross domestic product) and corporate spending. According to the Federal Reserve, U.S. corporations are sitting on $1.93 trillion in cash and liquid assets, accounting for 7.4 percent of total corporate assets - the highest share since 1958. That shows just how reluctant companies are to expand while our economy spits and sputters forward. This package would provide some predictability.
The president also knows that once the new Congress takes office in January, he will lose precious leverage to deliver results for the middle class and the unemployed. Taking all these factors into account, he focused on what is so desperately needed, and offered a vehicle for job growth coupled with a quickening economic recovery.
Congress should vote to enact this package. All workers will automatically receive a one-year payroll tax reduction that puts more money into our paychecks. Middle-income earners will get a two-year adjustment to the alternative minimum tax and renewed itemized deductions such as child care, earned income and college loan tax credits. That means households will be saving hundreds to thousands of dollars annually. The extension of jobless benefits will help thousands of suburbanites and others stay afloat until our job growth increases.
The net effect will be the injection of nearly $900 billion into an economy growing too slowly and perhaps teetering on the edge of a debilitating wave of deflation. And the recovery this package produces will strengthen Obama's hand in leading a serious debate on deficit reduction and fundamental tax reform as the battleground for the 2012 campaign.
Which brings us to politics. Moderate suburban Democrats succeed as a voting bloc when we are joined by registered Independence Party and unaffiliated voters. We lost them this past election cycle. If elected Democrats don't respond to the hardships of moderate Democrats and Independent and unaffiliated voters, the party won't carry the suburbs in 2012. On Long Island and in the other New York City suburbs, where property taxes continue to explode as property values recede, many families are struggling to pay ever-rising college tuition bills. Two wage-earners making $250,000 do not feel rich - they feel strapped. By advancing this package, Obama is responding to the concerns of suburban voters like us.
A Gallup poll last week validates these assumptions: 67 percent of independents and 52 percent of Democrats support extending the tax cuts for all Americans; 71 percent of independents and 84 percent of Democrats support extending unemployment benefits.
In two years, House Democrats will come to suburban Democrats and ask for our financial support and votes, specifically to reclaim the six House seats Democrats lost throughout the state. Before they do, they need to prove that Democrats are in fact a party of economic growth. That's the best way we can persuade Independence Party members and unaffiliated voters to rejoin us in 2012.