In this installment of our ongoing Budget 101 blog series, we’re exploring what was in the “fiscal cliff” package passed by Congress over the New Year’s holiday. Late last night, the House of Representatives passed the Senate bill to pull us back from the fiscal cliff — the combination of tax and spending changes that were set to go into effect today and could have sent the U.S. economy back into a recession. But the deal, which President Obama is expected to sign, dealt only with the tax changes and merely delayed the spending cuts known as sequestration.
AAUW commends lawmakers from both parties for coming together to reach a true compromise (look up how your senators and representative voted). Like any compromise, the deal is far from perfect, but it includes several AAUW-supported provisions that will help women and their families, such as
- Returning to the Clinton-era tax rates for high-income earners while continuing the current rates for individuals earning less than $400,000 and families earning less than $450,000
- Extending the American Opportunity Tax Credit, an AAUW-supported $2,500 tax credit to help college students and their families pay for tuition and related expenses
- Ending the payroll tax holiday and returning to the previous rate of withholding, therefore protecting Social Security’s long-term solvency
- Extending federal unemployment insurance for another year, benefiting those unemployed for longer than 26 weeks
- Delaying the automatic, across-the-board spending cuts for two months, giving Congress more time to find a way to protect key programs like K–12 funding, Pell Grants, and family planning from sequestration
Although the automatic spending cuts have been delayed, they are still dangerous. In the next two months, Congress will need to find a solution to avoid deep cuts to important investments such as education, funding for civil rights enforcement, women’s health programs, and workforce training programs.
The 113th Congress, which begins on January 3, is in for a bumpy next few months. The sequestration delay is projected to end at roughly the same time the United States hits its newly set debt limit (early March), setting the scene for a pitched political fight. This will likely be followed by another battle when the current appropriations bill that is funding the government expires in late March.
AAUW is a nonpartisan organization, but we’re also multi-partisan, representing a variety of political affiliations and viewpoints. Despite our differences, AAUW members come together to get things done and serve our communities. Congress should do the same. AAUW members will continue to press Congress to support budget policies that further the principles of fairness and fiscal responsibility and protect women and their families.
Make your voice heard! Sign up for AAUW’s Action Network and speak up for women and families.