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Congressional Black Caucus Says Obama's Tax Plan Compromise is Harmful to African Americans

Joyce Jones | 12/10/2010, 8:18 p.m.
Rep. Barbara Lee (D-California} Courtesy Photo

The White House says it will benefit this group

At a Friday press conference on Capitol Hill, Rep. Barbara Lee (D-California), who chairs the Congressional Black Caucus, said that an "overwhelming majority" of the group opposes the tax plan brokered by President Obama and Senate Republicans.

"We're extremely concerned that the cuts that could be made should this package pass would disproportionately hurt the poor and low-income communities and further erode the safety net," Lee said. "We don't want to create a situation here that will exacerbate the conditions for Americans who are already hurting. That would be unfair and would be unwise."

The caucus endorses three components of the plan: a 13-month extension of emergency unemployment insurance benefits; a payroll tax holiday or an equivalent, such as a tax rebate check that will not deprive the Social Security fund of revenue; and a two-year extension of the Bush-era tax cuts for middle and low income families. But the group is also calling for additional unemployment assistance for people who've been unemployed for more than 99 weeks and the extension of provisions in the Recovery Act, such as the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit.
Rep. Bobby Scott (D-Virginia), a member of the House Budget Committee, said that Congress should allow all of the tax cuts to expire to prevent Congress from having to make "draconian spending cuts to vital programs" in next year. He said that the CBC's plan would cost approximately one-half of the president's proposal and also would create the same number of jobs. In addition, Scott warned, a temporary extension of tax cuts for all income levels could hurt the president and other Democratic lawmakers seeking reelection in 2012. It will be extremely difficult, if even possible at all, to extend tax cuts into an election year and then cut them off, he said.

"The Tea Party will be intimidating all of the Republicans into getting in line to make these things permanent, and they'll be running like Santa Claus. What are the--what are the Democrats going to do? I mean, the last presidential candidate that I remember running on a platform of increasing taxes was Walter Mondale, and that was not a successful strategy," Scott said.

U.S. Virgin Islands Delegate Donna Christensen agreed. "This just gives our Republican colleagues another chance to play gotcha," she said. "When the 2012 election rolls around and the tax cuts are about to expire, if we don't extend them again, we the Democrats will be accused of raising taxes. Gotcha. Well, we're not playing that."
In a conference call with reporters later that day, Cecilia Rouse, a member of the White House Council of Economic Advisors, said that Obama actually won more than he ceded in the bipartisan tax cut agreement, such as the reduction in payroll taxes, the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit. She also said that Obama will continue to fight the reduced estate tax and tax cuts for wealthy Americans.

Moreover, Rouse said, the agreement will benefit African Americans. For example, 4.1 million African American children will benefit from the ETIC extension; without it, their families could lose up to $1,040, Rouse said.

The unemployment insurance extension also will help a significant number of African Americans, Rouse said: "Without this extension, 330,600 African Americans looking for work would have lost their benefits this month alone, and through the end of the next year, over 1.1 million unemployed African Americans would have lost their benefits."
The Senate, meanwhile, is continuing to move forward with the legislation and could vote on it as early as Monday.

"We're going to look at what takes place and determine our strategy as this evolves," Lee said. "Certainly there are a variety of legislative strategies and options that we're considering, but at this point we don't know exactly how this will play out."

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