January 2, 2013 | by Chris Johnson
LGBT, AIDS cuts held off two months under ‘fiscal cliff’ deal
Joe Biden, Barack Obama, White House, Democratic Party, gay news, Washington Blade

Vice President Joe Biden and President Barack Obama appeared at the White House last night to discuss the fiscal cliff deal (Washington Blade file photo by Michael Key)

The legislative package that Congress passed this week to avert the “fiscal cliff” puts off for only two months devastating across-the-board budget cuts to federal programs — including programs directly relevant to LGBT people and people with HIV/AIDS — putting advocates in the position to continuing fighting for them in the weeks to come.

The deal, known as the Biden-McConnell plan because it was negotiated by Vice President Joseph Biden and Senate Minority Leader Mitch McConnell, raises an estimated $620 billion in revenue for the U.S. government. It continues the Bush-era tax cuts for lower and middle-class income households while eliminating them for individuals making more than $400,000 a year and married couples making more than $450,000.

Immediately following House passage of the bill, Obama delivered a statement at the White House saying passage of the plan fulfills his campaign promise to adjust a tax code that favored the wealthy at the expense of fiscal health for the country — although he had campaigned on letting tax cuts expire households with a lower income of $250,000 a year.

“Thanks to the votes of Democrats and Republicans in Congress, I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing a middle-class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America,” Obama said.

Some spending cuts are also in the plan. The agreement saves $12 billion, half in revenue and half from spending cuts which are divided equally between defense and non-defense programs. But the plan also places a two-month hold on the much larger sequester instituted under the Budget Control Act of 2011 in automatic cuts that were supposed to take effect on Wednesday.

Under the proposed cuts, $1.2 trillion would be cut for the U.S. government across-the-board for starting this year over the course of 10 years. An estimated 8.2 percent in the first year would be cut from discretionary federal programs, including HIV/AIDS and LGBT-related programs.

The cuts could be particularly devastating to individuals with HIV/AIDS who receive medication through AIDS Drug Assistance Programs. Some estimates predict that proposed cuts could lead to up to 12,000 people being placed on waiting list for drugs. Also on the cutting board may be housing provided to low-income people with AIDS.

Carl Schmid, deputy executive director for the AIDS Institute, said HIV/AIDS advocates will have to continue fighting to ensure an alternative plan is proposed that would stave off these massive cuts.

“We will still have to work to protect our programs over the next couple of months,” Schmid said. “I don’t see an appetite to address taxes again so they will have to address the spending side and entitlements along with the debt limit in the new Congress.”

Exemptions to theses cuts include to Medicaid — a program under which an estimated 50 percent of people with HIV/AIDS reductions rely on for support — as well as Social Security. Medicare cuts would be limited to a 2 percent reduction to providers.

The proposed cuts could also interfere with the investigation and prosecution of hate crimes against LGBT people and reduce or possibly eliminate funds for programs like the National LGBT Aging Resource Center and the LGBT Refugee Resource Center could be reduced.

LGBT groups — including Human Rights Campaign and the Center for American Progress — acknowledged that their fight to preserve funding for these programs continues despite the deal reached this week.

Michael Cole-Schwartz, an HRC spokesperson, said his organization has no position on the deal overall, but supports putting off the sequester to make more a balanced approach to spending cuts at a later time.

“HRC does not have a position on the overall package,” Cole-Schwartz said. “However we support the delay in the sequestration cuts which would be devastating to our community and will be working with the new Congress to mitigate the impact of budget cuts as they take up the issue over the coming months.”

Jeff Krehely, the Center for American Progress’ vice president of LGBT research at the Center for American Progress, also had no comment on the overall deal, but expressed concern the way sequestration is being discussed in current debate.

“I can say that I remain concerned that the current conversation seems detached from the real-world impacts that sequestration could have on vulnerable populations,” Krehely said. “It also seems increasingly likely that advocates will have to continue to engage on these issues for the near-term, at least. It’s not going to be wrapped up neatly anytime soon.”

In November, a coalition of 25 organization led by Center for American Progress and the National Gay & Lesbian Task Force issued a report detailing how the proposed would impact hurt LGBT employment discrimination claims, limit the ability of the federal government to address the high rate of homelessness among LGBT youth and reduce funds for programming directed at LGBT health.

Obama in his White House statement seemed intent on pursuing additional cuts to federal programs — saying he agrees Medicare is “the biggest contributor to our deficit” — while he added the country “can’t simply cut our way to prosperity.”

“Cutting spending has to go hand-in-hand with further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans,” Obama said. “And we can’t keep cutting things like basic research and new technology and still expect to succeed in a 21st century economy.

One anti-gay group is expressing outright opposition the deal. Before the House voted on the measure Tuesday night, Tony Perkins, president of the Family Research Council, issued a statement decrying the measure for not addressing entitlement reform or introducing significant spending cuts.

“This deal fails the American people by allowing for more runaway spending from the federal government,” Perkins said. “President Obama has made it clear he has no real intention to address Washington’s out of control spending problem. By voting for this package, Congress gives the green light to finance his liberal agenda and further burden taxpayers.”

Perkins also took issue with what he said was a tax penalization for married couples that will result in the deal.

“Research out of Family Research Council’s Marriage and Religion Research Institute routinely shows that married couples with children create the most capital and generate the most income on average,” Perkins said. “This economic activity leads to higher revenue for government and more capital for economic expansion. Why then would we penalize marriage? We should be encouraging family formation, not penalizing it.”

This complaint of tax penalization against marriage comes from one of the chief organizations working to prevent legalization of marriage for same-sex couples.

Another provision in the bill also would have an impact on wealthy married same-sex couples in comparison to their straight counterparts. The agreement raises the tax rate on the wealthiest estates – those worth upwards of $5 million per person – from 35 percent to 40 percent.

Because of the Defense of Marriage Act, gay Americans in same-sex marriage who are wealthy enough will have to have pay this estate tax to receive the inheritance of their spouse, unlike straight Americans in the same situation. New York widow Edith Windsor is challenging DOMA before the Supreme Court on the basis that she had to pay $363,000 in estate taxes upon the death of her spouse, Thea Spyer.

According to a November 2009 report from the Williams Institute, this differential treatment of gay and married couples in the estate tax code was set to affect an estimated 73 same-sex couples that year, costing them each, on average, more than $3.3 million.

Jimmy LaSalvia, executive director of the conservative group GOProud, has been an opponent of the estate tax and said the hike continues a discriminatory policy that was already made permanent in Democrats in years past.

“We said two years ago when Nancy Pelosi and Harry Reid passed legislation to make the estate tax permanent, that it is ‘discrimination by taxation,’” LaSalvia said. “These changes certainly twist that knife.”

CORRECTION: An initial version of this article misstated the terms for tax increases under the “fiscal cliff” plan. The Blade regrets the error.

Chris Johnson is Chief Political & White House Reporter for the Washington Blade. Johnson attends the daily White House press briefings and is a member of the White House Correspondents' Association. Follow Chris

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