Asbury Park Press

Federal Tax Cuts Leave State's At-Risk Residents With Less

Asbury Park Press — Sunday, January 29, 2006

By PHYLLIS SALOWE-KAYE

It is easy for a politician to say, "I am going to cut taxes," but it is rare for a politician to tell us who is going to pay for tax cuts. As many people are aware, $1.8 trillion in tax cuts were passed by Congress in 2001 and 2003, primarily to benefit the very rich.

A lesser known fact is these tax cuts have been slowly phased in to make it easy for politicians to avoid answering the tough questions about who is going to pay for them. So far, about 80 percent of the tax cuts have been realized, and the full effect of tax cuts will be felt in 2010.

We got a glimpse of who is paying when Congress voted to cut $40 billion from vital health care and education programs in the wee hours of Dec. 19. Instead of citing the recent tax cuts as the reason for these devastating program cuts, or admitting they did not have time to read the 774-page bill before they cast their vote, the Republican majority told us sacrifices need to be made for the victims of Hurricane Katrina. This is a puzzling rationale when you consider that a day later, the Senate approved $27 billion in tax cuts for the richest people in the country.

Congress' "Robin Hood in Reverse" approach is nothing but mean-spiritedness. Instead of giving relief to the 1.2 million people in New Jersey or the 45 million people nationally without health insurance, Congress approved cuts that will push people off Medicaid and cause the number of uninsured to rise even higher.

In New Jersey, 485,000 of the people who are at risk of losing their coverage are children. It is unconscionable to ask children and other New Jersey residents to go without health care so the wealthy can get another tax cut.

Education costs are soaring. Every year, nearly 200,000 high school graduates do not go to college because they cannot afford it. Students who do go to college are graduating with more debt than ever. Instead of finding ways to help make college more affordable, Congress cut student aid by $12.7 billion. Students who are trying to better their lives will be graduating with greater debt or not going to school at all so they can pay for tax cuts for the wealthy.

Many of the costs associated with the federal budget cuts will likely be paid by New Jersey taxpayers. As a compassionate state, we often make up for federal shortfalls in needed social programs, leading to increased state costs, which in turn lead to higher state and local taxes. A projected $6 billion budget deficit not only limits our ability to absorb these costs, it is also unfair that the federal government is foisting these costs upon us.

Not only are these tax cuts unwarranted and unfair, they are fiscally irresponsible because they do nothing to reduce the growing federal deficit and actually make it worse. The transition from record surpluses to record deficits is clearly a result of tax cuts for the rich.

In 2005, we paid more than $350 billion in interest on the federal debt instead of funding programs to decrease costs for education and health care. By increasing debt with tax cuts, we are not only cutting programs but also passing these deficits on to our children and grandchildren who will someday have to pay for them.

During the early morning hours of Dec. 19, New Jersey Republican Reps. Frank LoBiondo, H. James Saxton, Scott Garrett, Michael Ferguson and Rodney Frelinghuysen made a bad choice and voted "yes" for this terrible budget. But because the Senate made some minor adjustments to the budget after it passed the House, another vote on the legislation is scheduled for Wednesday. This will give our representatives another chance to review and understand the negative impacts of the budget, and do the right thing by casting a "no" vote.

A "no" vote on this budget will send a strong message to the people of New Jersey that our congressional delegation is united when it comes to protecting the health and welfare of our children, our students, our seniors, disabled citizens and low-income working families. After voting "no" on the federal budget, Congress should repeal the 2001 and 2003 tax cuts, repay the deficit and find real solutions to the problems associated with health care and education.

Phyllis Salowe-Kaye is executive director of New Jersey Citizen Action.

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