Officials talk fiscal cliff deal
PARKERSBURG – Although the fiscal cliff was averted and tax cuts are expected to benefit many West Virginia families, retirees and senior citizens are still concerned about how the situation continues to develop as state and federal officials consider spending cuts.
Earlier this week, federal lawmakers reached an agreement to prevent massive cuts in the nation’s budget and prevent large tax increases on most Americans.
U.S. Sen. Jay Rockefeller, D-W.Va., said the deal will cut taxes for 99.7 percent of West Virginians and continue tax credits to spur business growth and economic investment, and to help thousands of West Virginians keep more money in their pockets.
“West Virginia families work hard, but many still struggle to get by,” Rockefeller said in a release Thursday. “Our economy has begun to recover, but we still have further to go, and many West Virginians have yet to feel any improvements.
”This bill makes sure hundreds of thousands of West Virginians continue to get much of the help they received before by extending tax cuts for middle class families, while also continuing tax credits that are proven lifelines for so many West Virginians.”
Among the tax cuts and credits West Virginians will continue to receive are the Earned Income Tax Credit (EITC), Expanded Child Tax Credit, American Opportunity Tax Credit and the Alternative Minimum Tax (AMT) patch, Rockefeller said, which can result in significant savings for many.
Tax cuts for economic development, mine safety, and school construction include New Markets Tax Credit (NMTC), Mine Rescue Team Training Credit, Election to Expense Advanced Mine Safety Equipment, Short Line Rail Track Maintenance Credit and Qualified Zone Academy Bonds (QZAB).
The agreement includes continuing federal unemployment benefits for around 10,000 West Virginians, who are looking for work.
”There are another 29,000 jobless West Virginians who are currently receiving state benefits, and if needed after that time, will now be able to receive federal benefits until the end of 2013,” Rockefeller said. ”From the beginning, I made clear that I would work to protect crucial safety nets for so many West Virginians, and this bill does that.”
However, the deal agreed upon let the Social Security payroll reduction expire. The rate had been reduced a couple of years ago. The Social Security payroll tax is going up 2 percent to 6.2 percent.
Gaylene Miller, state director for AARP West Virginia, said it is not a tax increase. The rate is returning to its original level of two years ago, she said.
The reduction was meant to be temporary, she said.
Returning it to its original levels will strengthen Social Security for those who depend on it, Miller said, adding continuing the reduction ran the risk of undermining Social Security.
”This was a payroll holiday and the holiday is over,” she said. It will be beneficial to have this dedicated funding stream restored, she said.
Miller said their members were concerned about the deficit, but believe programs like Social Security and Medicare should be strengthened and separated from the conversation of programs that should be cut.
Mike Dennis, executive eirector of the Wood County Senior Citizens Association, said the Social Security payroll tax issue has not been on its radar and did not know about its impacts.
”We have been more concerned with fiscal cliffs and reductions in state and federal funds that help operate the center here,” he said.
Although the fiscal cliff was averted, plans were being formulated to deal with abrupt funding cuts.
”We were informed two to three weeks ago by the state to what our reductions would be if the automatic cuts were made,” Dennis said. ”They would have been significant. They would have hurt a number of seniors we provide meals to and provide transportation for.”
”From my point of view, we have spent the last 15 years being very stagnant in our revenue and funds we have received,” Dennis said. ”I have been told there has been no significant increases in the Older Americans Act money in about 20 years.”
”The government should look at that and take that into consideration that our funds have not gone up in years while food prices have gone up, gasoline prices have gone up, minimum wage has gone up, everything has gone up in that time period, but our revenue has not,” Dennis said.