FIRST THINGS FIRST!--Before the Tax Cuts

Are any efforts being made to at least postpone President Bush's phased in tax cuts given the events of September 11, 2001, the costs of the war effort, and the economic recession? Sen. Jan Schakowsky is one of the few in Congress who have publicly called for meeting other domestic needs before the tax cuts go into effect. She introduced legislation on October 2, 2001, to do just that.

Rep. Jan Schakowsky (D-IL)introduced legislation on Tuesday, October 2, that would reinstate the top 39.6% marginal tax rate, freeze the 30.5% and 35.5% tax rates, and freeze changes in the estate tax with the exception of increasing the exemption level for small family farms and businesses UNTIL the following needs -- first things first -- are addressed, including adequately responding to needs created by the September 11 attacks; extending the solvency of Social Security and Medicare; providing a comprehensive Medicare prescription drug plan; funding school modernization and hiring 100,000 new teachers; and significantly reducing the number of people with worst case housing needs.

While we each may differ about what the priorities ought to be, OMB Watch believes this is an important step in the right direction and we are endorse this effort. Following is a letter from Rep. Schakowsky giving more details and contact information if you would like to endorse the legislation or write your own letter of support

September 28, 2001


Dear Friend:

Next Tuesday, I will introduce the First Things First Act of 2001. This bill will put on hold certain parts of President Bush's tax cut -- those parts that benefit the wealthy -- until critical domestic needs are met. I would like to request your support for this bill.

Many of us opposed the Bush tax cut for putting the interests of the wealthy ahead of the needs of the nation. Instead of using the surplus to protect Social Security and Medicare, provide a comprehensive prescription drug benefit, increase educational opportunities or meet affordable housing needs, the tax bill used the surplus to provide benefits to those who least need help. Nearly half of the tax cut benefits the wealthiest 1% among us. In light of September 11, the tax cut is even more irresponsible and even less defensible.

The First Things First Act would provide more than $300 billion over
10 years by:

  1. Reinstating the top marginal tax rate at 39.6 % beginning January 1, 2002,
  2. Freezing the tax rates for the current 30.5% and 35.5% brackets, and
  3. Freezing changes in the estate tax for individuals while providing the small business and farm exemption that would have been allowed under the Democratic alternative.

The bill requires that before any changes in the upper marginal rates or estate tax are allowed to go into effect, the following needs must be met:

  1. Adequate responses to the needs created by the September 11, 2001 terrorist attacks on the United States, including impacts on workers
  2. Extended solvency of the Social Security and Medicare Trust Funds.
  3. Provision of a comprehensive prescription drug benefit under Medicare.
  4. Federal funding of school modernization and the hiring of 100, 000 teachers.
  5. A significant reduction in the number of people who face worst case housing needs.

Again, I would greatly appreciate your support for this effort, by agreeing to have your organization listed as an endorser or through a letter outlining your support. If you have questions or want to lend your support, please contact Jon Samuels or Cathy Hurwit at 202-225-2111. You can fax letters of support to me at 202-226-6890 or mail them to 515 Cannon HOB, Washington, D.C. 20515.

Thank you for your help.


Jan Schakowsky

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