News Column

At Edge of Fiscal Cliff, Everyone Fights to Protect His Bit of Budget

November 26, 2012

As Washington debates how to trim runaway federal budget deficits without going over a "fiscal cliff" of immediate tax increases and automatic spending cuts, special interest groups are mounting aggressive campaigns to make sure that they're not the ones who have to pay the price.

Defense companies, health care providers, public broadcasting and even national parks enthusiasts are warning that cuts to their interests would cost jobs and hurt consumers. Some say that all entitlements such as Medicare and Social Security should be off-limits. So, too, should be federal aid to education. And tax breaks for contributions to charity. Others say the wealthy should shoulder the burden.

Several unions, including the Service Employees International Union, the American Federation of State, County and Municipal Employees and the National Education Association, launched an advertising campaign Tuesday in five states - Alaska, Colorado, Missouri, Pennsylvania and Virginia - urging tax increases on higher incomes. AARP, the massive group of older Americans, is planning a "Lobby Day" next month. And others are mobilizing.

Their key message is that the top tax rates on individual income above $200,000 and family income over $250,000 need to go up. They also want to ensure that entitlement programs - Medicaid, Medicare and Social Security - are protected in any kind of a "grand bargain" between President Barack Obama and Congress.

"We need a balanced approach to the nation's fiscal challenges which protects the benefits provided by these programs, continues the middle-class tax cuts, invests in job creation and asks wealthier individuals to pay their fair share," said Chuck Loveless, AFSCME federal government affairs director. The union wants Medicare, Medicaid and education protected from cuts.

AARP, one of the most powerful lobbying groups in Washington, is working to ward off any cut in benefits in the programs that aid the elderly and the poor.

"Our biggest concern is that the end-of-the-year debate may look to Medicare and Social Security to make cuts," said David Certner, AARP's legislative policy counsel. The possibilities on the table include reducing the cost-of-living adjustment for Social Security benefits this year, raising Medicare eligibility from age 65 by one or two years, and requiring co-pays on some Medicare benefits.

Others are pushing for changes in those same programs.

In a letter to Congress signed by more than 200 businesses, the U.S. Chamber of Commerce said that lawmakers should extend all of the expiring tax cuts, including those for income above $200,000, and turn instead to entitlement programs. "Our nation's entitlement programs are unsustainable. If we do not make sensible reforms, the programs will go bankrupt - and so will the nation," said the letter.

Meanwhile, the American Sustainable Business Council and Business for Shared Prosperity sent Congress a letter signed by 600 business owners, urging that the top rates go up.

"Contrary to what tax-cut defenders claim, job creation is driven by customer demand, not taxes," said Josh Knauer, president and CEO of Rhiza Labs, a Pittsburgh-based software company.

But taxing the wealthy has its downside, as several groups are arguing that limiting charitable deductions for the most well-to-do will hurt everything from the arts to education to relief efforts by the American Red Cross.

"We understand this idea of capping deductions is gaining some ground with both parties," said Geoff Plague, interim vice president for public policy at Independent Sector, an association that represents nonprofits. "Our message is that there ought not to be a cap because of the impact on charitable giving."

The Charitable Giving Coalition, representing more than 50 nonprofit organizations and charities, is taking to Capitol Hill on Dec. 5 during the lame-duck session of Congress to make the case for preserving the existing charitable deduction.

All of this leaves lawmakers with the task of weighing the special interests.

No member will concede that an interest group directly influences his or her vote. They all say they'll listen to anyone, but what they want is information.

"It's often hard to separate the politics from the presentation," said Rep. Joseph Crowley, D-N.Y. "You can't avoid it; it's part of the life of being a member of a legislature."

They also see another motive in the pitches. "A lot are generating funds," said Rep. Gene Green, D-Texas.

Sen. Michael Crapo, R-Idaho, is one of the Senate's "Gang of Eight," four Democrats and four Republicans who have been working for years to craft a bipartisan budget deal.

Crapo said he approaches interest groups by first saying everything has to be on the table, including that group's interest. He looks at the "zero option," or eliminating a program, then will ask why it should be restored.

"Instead of taking 1,000 pages and going one by one, and having people saying, 'Don't touch this,' they have to build it back in," he said. "It changes the dialogue. Instead of everybody being in opposition, they can offer a positive response."



Source: (c)2012 McClatchy Washington Bureau Distributed by Mclatchy-Tribune News Service.


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