The fiscal cliff tax bill passed by the U.S. House drew support from all four Washington Republicans in Congress and all but two of the state’s congressional Democrats.
Democratic Reps. Adam Smith of Bellevue and Jim McDermott of Seattle voted against the controversial measure that preserved Bush-era tax breaks for those earning less than $400,000 a year. It also extended other tax cuts, such as the sales-tax deduction for Washington and other states that lack an income tax, but it left pending budget cuts unresolved.
In the Senate, Democratic U.S. Sens. Maria Cantwell and Patty Murray backed the measure, which averted $600 billion in spending cuts and tax increases. The Congressional Budget Office had warned the combination of cuts and lapsing tax breaks would push the country into a recession.
“Extending the state sales tax deduction puts an average of $500 back in the pockets of 850,000 Washington tax filers,” Cantwell said in a statement released shortly after the Senate’s 89-8 vote on New Year’s Day. “This bill also extends crucial tax credits for hiring returning veterans, building affordable housing and producing clean energy.”
The sales-tax deduction covers 2012 and 2013 returns, and Cantwell had said during a campaign stop in Olympia in late October that it would be a top priority for her after the election.
But in passing the bill, Congress let a 2 percent cut in payroll taxes lapse, which means most working people will see a bigger bite out of paychecks starting this week.
In the House, U.S. Rep. Jaime Herrera Beutler of Camas was among the 85 Republicans who also voted to pass the fiscal cliff bill. Also voting for it were the state’s three other Republican members of Congress: Dave Reichert of Auburn, Cathy McMorris Rodgers of Spokane and Doc Hastings of Pasco.
“This compromise is a first step, and we must take a bigger second step that puts an end to out-of-control federal spending,” Herrera Beutler said in a statement that noted lawmakers had been put in a position of having to accept higher taxes on the wealthy or see taxes raised on everyone after the Bush-era tax cuts expired on New Year’s Day.
Herrera Beutler represents the 3rd district, which included Olympia and the rest of southwest Washington until redistricting pulled its boundary south to leave only a southern sliver of Thurston County still represented. The new boundaries take effect Thursday with the swearing in of newly elected members of the House.
Smith also criticized the fiscal cliff measure for failing to address spending cuts or the debt limit, which looms as a new fight in two months. Smith also faulted lawmakers for making too many Bush-era tax cuts permanent and not producing a 10-year framework for getting government expenses under control.
“I voted against the fiscal cliff deal because it left too much uncertainty for government programs, lacked a realistic path towards deficit reduction, and fell short in providing necessary revenues to effectively move towards fiscal responsibility,” Smith said in a statement.
Until Thursday, the 9th district has represented a suburban population along Interstate 5 from Lacey to Tukwila, including Joint Base Lewis-McChord. Redistricting has pushed the district farther north from northeast Tacoma to Bellevue, making it more liberal.
Democrat Denny Heck of Olympia is scheduled to be sworn in Thursday afternoon to serve in the state’s newly formed 10th district, which extends west from Olympia to Shelton and north to University Place and Puyallup.
Heck said he “probably” would have voted for the tax measure, believing action was needed to avoid a recession and believing the sales-tax deduction was important to the state.
Without the agreement, Heck said, a recession could have cost 1 million to 2 million people their jobs.
“The truth of the matter is, they took a partial bite,” Heck said of Congress. “And it’s my observation about this institution that’s pretty much what they do over the long term. They took a partial bite; they dodged a bullet.”
Heck added: “It seems to me that yesterday they did all the fun things; they kept taxes from going up on 98 percent of the nation. Now the work they left is the harder work, which is trying to solve the long-term-debt problem. There are plenty of hard decisions ahead.”