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Fiscal Deal Minimizes Negative Impact on Poor People

Washington, DC, January 2, 2013

Nearly 24 hours into 2013, Congress passed a last-minute deal to avoid sending the country over the fiscal cliff. Bread for the World is thankful that the deal minimizes the negative impact on poor and hungry people.

“Budgets are moral documents. Their impact on those whom the Bible refers to as ‘the least of these’ tells the world what kind of country we are,” said Rev. David Beckmann, president of Bread for the World. “This compromise isn't perfect, but it is a good deal that will prevent major economic damage that would have affected hungry and poor people the most.”

The deal, which passed the Senate 89 to 8 and the House 257 to 167, extends most of the tax cuts that technically expired on Dec. 31. Included is a five-year extension on improvements made to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) over the last decade, providing support to low-income working families. The deal also extends emergency unemployment benefits for one year, preventing an estimated 2 million people from losing unemployment benefits just a week after Christmas. 

“The imperfect deal that Congress approved is far from a comprehensive deficit-reduction plan that puts the country on a fiscally sustainable course,” added Beckmann. “However, it steers clear of a tax increase for the majority of tax payers, thus reducing the economic risk of going over the fiscal cliff. It also protects unemployment insurance and tax credits for low-income working people.”  

The deal postpones for two months the “sequester” (across-the-board cuts) that were mandated by the Budget Control Act last year to all annually appropriated programs. The same act, however, exempts the biggest anti-poverty programs in the country—Medicaid, tax credits for the working poor, SNAP (formerly food stamps), and child nutrition programs.

“The sequester would impact our development efforts overseas, reducing vulnerable peoples’ access to vital food aid,” warned Beckmann. “It could also result in hundreds of thousands of low-income women and young children losing WIC benefits here in the United States.”  

In addition, the fiscal deal—known as the American Taxpayer Relief Act of 2012—extends programs authorized in the farm bill through Sept. 20, 2013.

“While this is not a perfect deal, and does not fully address our long-term fiscal outlook, it is an important step,” added Beckmann. “We believe that the revenues raised will help reduce the deficit and support initiatives that lift people out of poverty. As we head into the New Year, I am grateful congressional leaders developed a shared proposal that largely protects hungry and poor people. We pray that the 113th Congress and the White House will make ending hunger a national priority.”


Bread for the World is a collective Christian voice urging our nation's decision makers to end hunger at home and abroad.

Media Contact:

Fito Moreno, Interim Media Relations Manager, 202-688-1138

 

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