Congressional Republicans and President Obama have apparently reached a deal that will see the Bush-era tax cuts extended for all Americans. As part of the deal, unemployment benefits will also be broadened for the long-term unemployed. Iowa Senator Chuck Grassley, a Republican, says the agreement is seen by many as a political compromise, but it shouldn’t be.
“Iowa families who are worried about less take-home pay in January don’t consider preventing a tax increase on them a bonus, a windfall or a handout,” Grassley says. “Tax revenue comes from taxpayers’ hard-earned money. It doesn’t grow on Christmas trees.” Grassley says the best way to help the fragile economy to recover is to stimulate growth, not to threaten everyone with a tax increase. He believes the ball should get rolling now to cement the deal into legislation.
“Both in big business and small business, there’s a lot of capital accumulation that could be used to create jobs,” Grassley says, “but nobody wants to move forward until they know what the tax policy is next year. If taxes go up, more money comes to Washington, there’s obviously less money back in the grassroots of America to hire people.” Under the tentative agreement, Grassley says the tax breaks that will expire at the end of this month would be extended to everyone for two years.
Grassley says, “Getting this thing settled, bringing a little certainty to what the tax policy is going to be for the next few years is very essential for getting unemployment down and getting the economy turned around.” Increasing taxes alone won’t help solve the deficit problem, Grassley says. Every time Congress gets an extra dollar, he says members find a way to spend a $1.15.
Iowa’s other U.S. Senator, Democrat Tom Harkin, issued a statement saying Republicans have used middle-class taxpayers as “bargaining chips” to get tax breaks for the wealthiest Americans. Harkin says, “To say that I am disappointed with the deal the President laid out is an understatement.”