The compromise reached to resolve the financial issues that pushed the nation close to the fiscal cliff split the Nebraska Congressional delegation.
While both Sen. Mike Johanns, a Republican, and Sen. Ben Nelson, a Democrat, voted in favor of the bill that passed the United States Senate 89-to-9, only one of Nebraska’s three House members voted for the bill; Congressman Jeff Fortenberry, a Republican. Republicans Lee Terry and Adrian Smith voted against the measure which passed the House 257-to-167.
Smith tells Nebraska Radio Network he couldn’t vote for a bill that didn’t include spending cuts to help reduce the federal deficit. The deal pushes off the deep, automatic budget cuts, the sequestration as it’s called, for another two months. Smith didn’t favor delay, but didn’t want to cancel the cuts either.
“But, to just cancel the sequestration really would pose problems for the realities that everyone knows exists related to spending,” according to Smith.
Smith says President Obama needs to lead to get federal spending under control.
“And nibbling around the edges will not do it. It will take significant reforms and the sooner we address these issues, the less painful it will be,” Smith says.
Smith says he doesn’t expect one bill to resolve the nation’s spending problems, but thought the deal should have taken a step in that direction.
“There were no spending issues in the bill, whatsoever,” Smith says. “And there are some who are concerned that the bill actually adds to the deficit rather than brings it down.”
Despite such reservations, Smith does like some aspects of the compromise. He says the agreement on the Estate Tax recognizes the impact it has on farm and small business operations. The deal preserves the $5 million exemption on estates. It increases the Estate Tax rate from the current 35% to 40% for estates over that threshold.
Smith says he would have preferred a new, five-year Farm Bill, but says a one-year extension of the current Farm Bill is better than a 30 or 60-day extension as had been suggested by some.
The deal brokered by Vice President Joe Biden and Senate Republican leader Mitch McConnell of Kentucky extends the Bush-era tax cuts permanently for families making $450,000 or less and individuals making $400,000 or less. The tax on capital gains and dividends will be set at 15% for those tax brackets as well, rising to 20% for the wealthy.
The Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit will be extended for five years. The Alternative Minimum Tax, created to keep the wealthy from using deductions to avoid paying income taxes, will be indexed to inflation to keep it from encroaching upon less-wealthy Americans.
The Social Security payroll tax, cut by 2% two years ago to get more money into the economy, will rise back to its normal level of 6.2%
Temporary business tax breaks, such as breaks for research and development as well as wind power, will be extended for a year.
A scheduled cut for the Medicare reimbursement to doctors and hospitals will be postponed a year.
Federal unemployment benefits for the long-term unemployed will be extended for another year.
AUDIO: Congressman Adrian Smith talks with Brent Martin about “fiscal cliff” deal. [4 min.]