Tag: federal budget

Shooting at the wrong target: sequestration cuts part of budget least responsible for deficits

March 7, 2013 at 8:00 amCategory:NC Budget and Tax Center

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Last week, Congress failed to repeal the $85.3 billion in automatic, across the board spending cuts known as “sequestration,” and as a result, these spending cuts have begun to take effect.   Sequestration is the wrong way to go about reducing our nation’s budget deficit—it will hurt North Carolina’s economy, weaken the fiscal position of the state budget, and damage key public investments like K-12 education, job training, and food safety. 

And despite inflicting all this damage, sequestration targets the portion of the federal budget that contributes the least to national deficits, making it the wrong tool for achieving meaningful deficit reduction. Instead, Congress should take a balanced approach to deficit reduction that replaces the sequestration cuts for 2013 with equal amounts of new revenue and smart spending cuts.

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The truth about sequestration

March 1, 2013 at 2:09 pmCategory:Uncategorized

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Two excellent (and brief!) new documents from the wonks at the NC Budget and Tax Center detail the specific impacts of the sequestration cuts that are hitting today and a responsible path out of the mess:

Click here to read “Just the facts: Fixing sequestration requires balance approach, new revenues.”

Click here to read “Taking a balanced approach: Four revenue options for fixing sequestration.”

Of course, both documents presuppose that lawmakers would want to use logic in solving the problem – something that seems increasingly unlikely given the central role of people like this in deciding what happens.

Congresswoman Ellmers appears to endorse sequestration cuts

February 26, 2013 at 2:41 pmCategory:Uncategorized

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The Washington Post reports that the sequester confrontation in Washington is a “moment of truth” for the Tea Party. The story also quotes Congresswoman Renee Ellmers as endorsing the disastrous cuts sequestration will bring about.

“Rep. Renee L. Ellmers (N.C.), who is part of the 2010 class of Republicans but not a member of the tea party caucus, said she worries about the sequester, especially since her district, home to Fort Bragg, would be hit hard. But she said it may have to happen.

‘I do believe it will start a very important process that will help our economy to start to grow,” she said. “The debt that we have at the federal level is our biggest threat for our country.’”

The sequestration mess

February 25, 2013 at 8:55 amCategory:Uncategorized

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This morning’s “Monday Numbers” edition of the Fitzsimon File has the fast facts you need to know about the havoc that sequestration will wreak in North Carolina. All in all, it shows why there’s more reason than ever to find a balanced solution to the budget debate in Washington.

Finance Committee Increases Tax Load for Working Families, Cuts EITC

February 13, 2013 at 4:06 pmCategory:NC Budget and Tax Center

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This morning, the House Finance Committee voted to reduce the state Earned Income Tax Credit (EITC) provided to low-income working families across the state. More than 883,000 North Carolinians claimed the credit in 2010, which provides working families with dollars to spend in their local communities. Each year the state updates its tax code to address changes made to the federal tax code during the previous year, as North Carolina’s tax code is linked to the federal tax code.

Improvements to the federal EITC were extended as part of the fiscal cliff deal, including eliminating the marriage penalty and extending the credit to larger family sizes. In decoupling the state credit from the federal credit, the Finance Committee voted to reduce the state EITC from 5% to 4.5% of the federal credit for tax year 2013. The result is a cut of $11 million to the state credit.

The EITC helps boost the wages of low-income families and helps them pay for basic necessities. Cutting the tax credit will further challenge the ability of these families to make ends meet and minimize its ability to address the upside down nature of our state and local tax system. The House finance committee also voted to cut the Work Opportunity tax credit. However, the committee did vote to increase the amount of itemized deductions that individuals can claim, which would largely benefit high-income individuals.