CONGRESSMAN COHEN’S STATEMENT ON THE STATE OF THE UNION ADDRESS

As proposed, the economic stimulus plan will provide tax rebates to working families of $300 to $600 for individuals and $600 to $1,200 for couples filing a joint tax return, plus an additional $300 for each child under the age of 17. For example, a family of four with a combined income of $60,000 could be eligible for as much as $1,800 in rebates. And any individual who paid at least $1 in income tax after deductions or earned at least $3,000 in income would be eligible to receive at least $300 (or $600 for couples). The rebates will be subject to a phase-out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 for married couples filing jointly).

The bill is expected to include approximately $50 billion in tax benefits for businesses by providing businesses with a 50 percent bonus depreciation for certain equipment purchased in 2008 and by doubling, to $250,000, the limit on the amount of qualifying purchases in 2008 that small businesses can "expense" in the year they are purchased.

In order to help small businesses quickly recover the cost of certain capital expenses, small business taxpayers may elect to write-off the cost of these expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Until the end of 2010, small business taxpayers are allowed to write-off up to $125,000 (indexed for inflation) of capital expenditures subject to a phase-out once capital expenditures exceed $500,000 (indexed for inflation). The stimulus package would double the amount that small business taxpayers may write-off to $250,000 for capital expenditures incurred in 2008 and would increase the phase-out threshold to $800,000 in 2008.

While the stimulus package provides some good news for taxpayers, I believe we need a progressive plan which includes provisions to extend unemployment benefits, increase food stamps, promote summer youth jobs programs and provide rebates for the seniors without earned income. I also believe there needs to be a cost-of-living adjustment for Social Security beneficiaries – something that is long overdue. Prominent economists agree that extending tax rebates to the Americans who live from check to check is the most effective means of boosting the economy during a downturn because that money is spent quickly on consumer goods. I will continue to work with other members of Congress toward these changes.

Unfortunately, the President’s speech included inaccurate remarks regarding Congressional “earmarks.” The number of earmarks exploded under previous House leadership, and for six years President Bush did nothing to slow their growth. The new majority, on the other hand, has enacted real reforms since taking office that have made the process more transparent. Earmarks were excluded entirely from the fiscal year 2007 spending bills and the dollar amount of FY 2008 earmarks was cut almost in half compared to FY 2006.

Under the current Administration, the $5.6 trillion 10-year surplus that was inherited has been turned into a $3 trillion 10-year deficit, more than a $8 trillion turn-around. America’s national debt has skyrocketed – climbing from $5.7 trillion in 2001 to $9.2 trillion today. Making the President’s tax breaks for multi-millionaires permanent and not paying for them, as he proposes, would add another $2 trillion to the debt over the next 10 years.

The current Congress has restored fiscal responsibility – re-imposing pay-as-you-go budget discipline for the first time this decade. We have also cut low-priority spending and passed a budget that balances by 2012 – unlike the President’s budget, which failed to balance. This year, we remain committed to fiscal responsibility -- enforcing the pay-as-you-go budget rules and continuing to restore strong congressional oversight of federal spending, to uncover and end taxpayers’ money being wasted on no-bid contracts for Halliburton and other wasteful, incompetent, or fraudulent contractors.

The President also called for more of the same in Iraq and offered no hope for a change of direction. 2007 was the deadliest year for U.S. troops in Iraq and the refusal to change direction comes even though the troop surge has failed to meet its stated objective: political reconciliation in Iraq. The toll on our troops and our treasury has been too great. It is disingenuous to call for taxes on the wealthy to be reduced, increase military spending in a war with no end in sight and saddle our children and grandchildren with ever-increasing debt.

While the current administration inherited a well trained and prepared military, America is now at great risk of not being ready to respond to the next unexpected crisis. Years of extended deployments have stretched our military thin. Our troops’ equipment is wearing out. Extended deployments have taken a toll on the lives of soldiers and their families. Not a single non-deployed Army unit in the U.S. is fully combat ready.

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Contact:
Marilyn Dillihay, Press Secretary, (202) 225-3265/ (202) 368-9275 (mobile)
Charlie Gerber, Communications Assistant, (202) 225-3265 / (202) 320-2817 (mobile)