DearRepresentative:
On behalf of the 362,000 members of the NationalTaxpayers Union (NTU), I write to offer our views on H.R. 3630, the “MiddleClass Tax Relief and Job Creation Act.” Although there are several less thandesirable elements in this package, they are outweighed by pro-taxpayerprovisions and generally constructive reforms to broken federal programs.
As NTU made clear during the Senate debate over theissue, the proposed extension of the reduction in the payroll tax is unlikelyto provide a significant boost to our economy, but given the continued financialhardship that many Americans face, maintaining a lower payroll tax rate is apositive way to provide a measure of comfort and confidence to workers andself-employed individuals who have been battered by the recession. The bill alsocontains other elements that could help to reverse job losses and add fuel tospark a recovery through expediting a final decision on the Keystone XLpipeline (a valuable source of energy and jobs to the United States), extendingthe 100 percent expensing of certain business assets, and allowing theEnvironmental Protection Agency time to reformulate job-killing regulations.
To varying degrees of success, H.R. 3630 would makechanges to some wasteful federal programs. On the one hand, the bill offerssensible reforms to the National Flood Insurance Program that would act asmodest protections against taxpayer-funded bailouts. On the other hand, moreprogress could have been made by embracing several NTU-backed amendments theHouse turned down earlier this summer to transition flood insurance to a moresolid private-sector-driven model. Furthermore, NTU would have liked to haveseen a more fundamental restructuring of antipoverty programs in exchange forthe reauthorization of the Temporary Assistance for Needy Families Program.Rep. Jordan’s (R-OH) Welfare Reform Act of 2011, H.R. 1167, would have provideda good model to accomplish this goal.
Finally, the package follows the prudent course ofaccommodating the bill’s fiscal impact largely by paring back futureexpenditures rather than relying on damaging tax increases. These offsetsinclude implementing a means-test in Medicare’s voluntary Part B and Dportions, extending the partial federal workforce pay freeze, implementing acompetitive auction process for spectrum, and eliminating the particularlyegregious “Prevention and Public Health Fund,” which used taxpayer dollars tofund state and local lobbying efforts for higher taxes and more restrictiveregulations on disfavored food and consumer products.
Despite the many positive aspects of H.R. 3630, it isby no means a perfect piece of legislation and contains several components thatshould give legislators pause, including its treatment of UnemploymentInsurance (UI). While we sympathize with families struggling to make ends meet,we do not believe the bill adequately confronts long-term concerns about UI’ssustainability or efficiency. Although H.R. 3630 takes some steps towardoverhauling UI, such as gradually reducing the maximum weeks of benefits from99 to a still-high 59 weeks, Washington’s goal should be to return UI closer tohistorical norms while helping the unemployed find permanent work through morevigorous pro-growth tax policies (beyond those found in the bill) thatencourage hiring and private sector investment.
Perhaps most troubling is that Congress is once againscrambling to craft a “must-pass” package of unrelated items in the waning daysof the session. This slapdash procedure, which leaves little time for taxpayersto grasp the wide-ranging impacts of the bill, is not consistent with thecommitments that many Members made to conduct the people’s business in atransparent and timely manner. Despite all of these flaws,the Middle Class Tax Relief and Job Creation Act charts a more rationalcourse than the many alternatives offered to it by avoiding major tax hikes,embracing greater spending discipline, and making some progress towardoverhauling several troubled programs. Accordingly,a “YES” vote on H.R. 3630 will be considered the pro-taxpayer position in ourannual Rating of Congress.
Sincerely,
Brandon GreifeFederal Government Affairs Manager