Senator Patrick Leahy says he’s working with a bipartisan group of senators to develop a compromise budget deficit plan that Congress can consider in the lame duck session after the November election.
If Congress fails to act on a number of financial issues during the Lame Duck session, it’s estimated that the tax burden of the average Vermont household will increase by several thousand dollars starting January first.
Here’s why. At that time, the so called Bush tax cuts will expire for everyone, the federal payroll tax rate will increase 50 percent, the expanded earned income tax credit will be eliminated and the child care tax credit for working families will be reduced.
At the same time, the federal budget will automatically be cut by $110 billion and the Defense Department budget is slated for the largest cuts. The entire situation is known as "The Fiscal Cliff."
Senator Patrick Leahy is concerned that a failure to deal with these issues will derail the nation’s fragile economic recovery.
"We have to look at both revenue and programs and to simply say let’s go over the cliff – no – it doesn’t help the country," said Leahy. "And I think that now that we’re recovering from what was a close to a depression in this county I would hate to see us throw us back and actually much of the rest of the western world."
A small group of senators known as "The Coalition of the Willing" is working behind the scenes to find the framework for a compromise. Leahy is involved with this group.
"I’m informally a member. I deal with parts of it. We go in and out on it. It actually comes down to about six to eight who meet very regularly," said Leahy. "I have given my input into it. I’m on the Appropriations committee where we are saving tens of billions of dollars and thus do have input to what’s going on there."
Leahy thinks the group can reach a compromise as long as the members recognize that it’s going to take a balanced approach to reach a deal.
"It can be effective if people stop saying no to everything," said Leahy. "After the election as President Obama is re-elected as I assume he will be then maybe they’ll sit down and say, ‘OK, now let’s start putting the country first and not politics first.’ If we put the country first and not politics first we can reach a solution."
Leahy says the lame duck session is the right time to hammer out a deal on these tax and budget issues. He says he’ll be very disappointed if Congressional leaders decide to delay the hard decisions until some time next year.