Star Tribune Op-Ed: An unseemly but necessary deal on taxes
My vote in favor of the tax deal was the hardest I've cast as a senator. I didn't like extending the Bush tax cuts for the wealthiest Americans -- and I think President Obama punted on first down.
But I came to the Senate to represent middle-class Minnesotans -- working men and women trying to make ends meet and build a better life for their kids.
And this bill provides them with help they desperately need.
First and foremost, it stops their taxes from going up on Jan. 1. And it gives families making $50,000 a year a $1,000 payroll tax break.
Meanwhile, the package extends existing tax cuts for working parents, low-income families with children and families paying for college.
The bill allows businesses to deduct from taxes every dime they invest to create jobs in 2011, generating up to $50 billion in new investment. And it includes help for Minnesota's wind, biodiesel and ethanol industries.
And for Minnesotans unable to find work and teetering on the brink of economic disaster, the bill offers nothing short of a lifeline.
Emergency federal unemployment benefits expired at the end of November, and Republicans had refused to restore them. That would have been devastating to struggling families.
Instead, those benefits will be fully restored through the end of 2011, preventing more than 100,000 Minnesotans from falling into the economic abyss as they look for work.
Keeping money in the pockets of struggling workers, avoiding a middle-class tax hike, and encouraging businesses to invest and grow -- these aren't just good ideas, they're critical to our recovery.
Mark Zandi -- a conservative economist whose data I often use -- predicts that the bill will add a full percentage point to economic growth next year, bringing unemployment below 9 percent by the end of 2011.
And if that were all that was in this bill, it would represent an enormous victory for Minnesota.
But I want to be clear about why extending the Bush tax cuts for the wealthiest was such a difficult pill to swallow.
It's not just that the rich don't need the help, or that cutting their taxes doesn't help the economy -- although there is overwhelming evidence to prove that case.
The problem is that these wasteful giveaways blow another huge hole in our deficit at a time when our budget is already dangerously out of balance.
Republicans and Democrats alike warn, correctly, that our long-term deficit is an urgent crisis. But even if we wanted to, it would be impossible for us to fix it simply by cutting spending or raising taxes. We have to grow our way out of this problem.
And economists who have studied the problem know exactly what we must do today to ensure that we have that growth in the years ahead: Invest in education, infrastructure, and research and development.
But if we've already maxed out our credit card on wasteful tax breaks for people who don't really need them, those investments won't get made.
And then we'll be in real trouble, helplessly in debt to countries like China that made those investments while we chose instead to give more to millionaires and billionaires.
It will be an absolute disaster for our country if Republicans succeed in turning this two-year extension into a permanent one. Rescuing our budget, and our country, from that fate is a fight we will have -- and must win -- over the next two years.
But for too many Minnesotans, disaster isn't around the corner -- it's staring them in the face.
Allowing taxes to go up for middle-class families could be the straw that breaks their backs. And allowing unemployment benefits to expire would take food off people's tables and force a lot more kids to spend Christmas in a homeless shelter or a car.
I wanted a better deal -- and I fought to change the bill to let the tax cuts for the wealthy expire and use those funds to protect Social Security, create jobs or bring down the deficit. Unfortunately, those amendments were defeated.
But the only thing worse than the deal we got would have been no deal at all. The only thing worse than voting for it would have been voting against.
Sen. Fanken's op-ed can also be found on the Star Tribunes website.