The looming “fiscal cliff” will result in automatic tax increases and spending cuts unless a deal is reached before year's end. To not come to some resolution will do profound harm to Oklahoma's children.
Nearly one-quarter of those children live in poverty. About two-thirds of them relied on either Medicaid or food stamps during 2011. The earned income tax credit, the child tax credit, unemployment insurance and food stamps prevented thousands more Oklahoma families from falling further into poverty last year. Yet the automatic budget cuts scheduled to go into effect on Jan. 1 would devastate these programs.
A single mother raising two kids in Oklahoma on a full-time minimum wage salary currently gets a $7,000 tax credit check thanks to the earned income and child tax credits. That check could disappear. The additional burden would be equivalent to a $3.50 per hour pay cut.
U.S. Rep. Tom Cole, R-Moore, recently strayed from the position of House leadership when he said we should lock in tax cuts for the middle class now and postpone fighting over tax increases for higher-income earners until later. Cole should be applauded for being part of a serious discussion about a critical issue.
As important as it is to avoid the fiscal cliff, we also must make sure any deal doesn't ultimately do as much damage as the automatic cuts. The solution is a balanced approach that includes new revenue and spending cuts — as has been endorsed by at least two bipartisan deficit reduction commissions. Several core principles should be reflected in any deal to avoid the fiscal cliff.
First, it must not exacerbate either poverty or income inequality. Any deal also must eliminate tax cuts for wealthy Americans. According to the nonpartisan Congressional Budget Office, extending those cuts for the wealthiest Americans would account for nearly half the projected growth in the nation's debt for the foreseeable future. There should be no harmful changes to the Medicaid and food stamp programs that are the safety net preventing even more Oklahoma children from living in poverty.
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