Fiscal cliff deal leaves Delaware workers paying more

The federal government hammered out a deal to avoid drastic spending cuts and tax increases, Jan. 1. The deal means workers were spared on income tax hikes, but Delaware workers will see an average of $13 less in each weekly paycheck.

Congress’s failure to vote on a bill to provide financial aid to Superstorm Sandy victims could also mean Primehook is still on hold for dune repairs.

Payroll tax hike

The end of the payroll-tax cut means all working Delawareans will pay more taxes in 2013, even though income tax cuts were extended.  According to the fiscal cliff deal, the payroll tax will rise from 4.2 percent to 6.2 percent.

Households earning $50,000 annually will lose about $80 per month – more than $1,000 per year – to the 2 percent increase.

According to the U.S. Department of Labor, the average weekly wage in Sussex County is $690, or $35,880 annually; a 2 percent increase would mean about $700 per year would go to taxes.

Legislators delayed a vote on sequestration, which refers to $110 billion in spending cuts, half in defense and half in domestic programs. Congress will take up those cuts in late February, when it could vote to offset automatic cuts with other spending cuts.

Primehook aid in question

The original legislation that would have provided billions in funding for victims of Superstorm Sandy is dead.  But a vote is expected on a new funding bill in the second day of the new Congress.

The Senate passed a bill calling for more than $60 billion in federal aid for Sandy victims; the House attempted to lower the amount to $27 billion, but never brought the bill to the floor for a vote before the end of the term.  A new Congress – which began Jan. 3 – will take up the issue but will have to start the legislation from scratch.

After facing harsh criticism from holding off the vote, House Speaker John Boehner has said he will hold a vote on $9 billion in Federal Emergency Management Agency flood insurance funds, Jan. 4.  Boehner said he would then schedule a Jan. 15 vote for an additional $50 billion in funds.

According to the Associated Press, New York, New Jersey, Connecticut, Washington, D.C., West Virginia, Virginia, Maryland, New Hampshire, Delaware, Rhode Island, Pennsylvania and Massachusetts have so far collectively received $2 billion in federal funds for Sandy relief; FEMA still has about $4.3 billion that can only be used for emergency services.

Funds requested to fill the breaches at Primehook Beach could be affected. Gov. Jack Markell requested $20 million in federal disaster aid to repair damages to Prime Hook National Wildlife Refuge caused by the superstorm.

Sandy widened the series of breaches along the coast of the Delaware Bay, north of Primehook Beach.  The storm damaged Prime Hook Road, the community's only public access. The road reopened shortly after the storm, but some areas remain unpaved and flood easily during high tide.

The U.S. Army Corps of Engineers partnered with Delaware Department of Natural Resources and Environmental Control to conduct a beach replenishment project in February 2012 in coastal Delaware.

Corps spokesman Stephen Rochette told the Cape Gazette in December the corps has the authority to restore coastal projects to pre-storm conditions at 100 percent federal cost. He said funding would depend on the extent of the damages.

Rochette said in a Jan. 3 email, the Army Corps has historically used funds from the Flood Control and Coastal Emergencies program, not FEMA.

Delaware legislators disappointed with deal

Delaware’s three federal legislators, all Democrats, were split on the vote.

U.S. Sen. Tom Carper, a member of the Senate Finance Committee, voted against the bill.  In a statement released hours after the vote, Carper said, “"Unfortunately, the deal the Senate passed this morning is not the grand bargain that I, and many of us, had hoped for, and that's why I ultimately voted against it.”

Carper said the plan should have done two things:  Reform entitlements to preserve Medicare, Medicaid and Social Security and increase federal revenue.  “In this deal, we did neither,” Carper said.

U.S. Sen. Chris Coons, a member of the Senate Budget Committee, voted in favor of the measure.  In a Jan. 1 statement, Coons said he was dismayed the bill did not do more.  “I am deeply disappointed in and frustrated by the failure to craft a big, balanced, bipartisan deal that achieved meaningful debt and deficit reduction by sharing the sacrifice to get our nation back on solid fiscal footing,” Coons said. “Instead, we got the bare minimum, which was averting an income tax hike on middle class families, extending critical tax credits for families and businesses and ensuring unemployment insurance will be there for the thousands of Delaware families counting on it.”

Congressman John Carney also voted for the bill, but said he was disappointed it was not more comprehensive. “Unfortunately, Congress has once again chosen to pass a short-term deal instead of a long-term grand bargain that would finally put the country on a sustainable deficit reduction trajectory,” he said in a Jan. 1 statement.