On the heels of a discouraging new census report on poverty and income, twelve House Republican Freshmen urge their leadership to renew an expired incentive for investment in low income communities
Representatives Steve Chabot and Steve Stivers joined ten of their freshmen Republican colleagues as co-signers on a joint letter urging Speaker John Boehner, Majority Leader Eric Cantor, and Majority Whip Kevin McCarthy to take action on the New Markets Tax Credit (NMTC). The NMTC, which expired on December 31, 2011, has delivered over $45 billion in private capital to credit-starved businesses and revitalization efforts in economically distressed urban and rural communities.
In their letter, the first term Republicans stressed the critical role that the Credit plays in financing business expansions, manufacturing, and community facilities in urban and rural communities at a time when credit remains tight and communities continue to suffer from high poverty and unemployment.
This week, a US Census Bureau report showed a continued decline in median household income between 2010 and 2011, the second consecutive annual drop in household income. For the third consecutive year the percentage of individuals living in poverty stagnated at 15%. With the unemployment rate still hovering above 8%, the data is clear: nearly four years after the Great Recession, much of America is still struggling. All NMTC investments go to communities experiencing high levels of poverty and unemployment, and to date, the program has delivered more than $45 billion in capital while generating 300,000 jobs for distressed communities.
In their letter, the lawmakers also pointed out that over 72% of NMTC financing goes to businesses in communities experiencing severe economic distress with poverty rates over 30%; unemployment rates 1.5 times the national average; or median incomes below 60% of the area median. At a time when many communities continue to face the worst economic conditions in two generations, it would be unwise to discard a tool with a track record of success in driving capital to even the most hard-hit communities.
In addition to this letter, supporters of the NMTC can take heart in the strong bipartisan support for two identical NMTC extension bills in the House and Senate, HR 2655, sponsored by Reps. Jim Gerlach and Richard Neal, and S. 996, introduced by Senators John Rockefeller (D-WV) and Olympia Snowe (R-ME). Both of these measures enjoy support from a broad constituency of liberals, moderates, and conservatives, including key members of both tax writing committees. Over 100 Members of Congress have sponsored NMTC extension legislation.
Congress is not expected to act on the New Markets Tax Credit or any other the other so-called tax-extenders until after the election. In the Senate, the Finance Committee passed a bipartisan bill that extended most tax extenders, including the New Markets Tax Credit. The House held several hearings on tax extenders in the spring but has yet to move legislation.
As Congress begins the hard work of hammering out a deal on expired or expiring tax provisions, this letter – along with the support for the two extension bills – sends a signal to Congressional leadership that there is broad support for a NMTC, with everyone from Tea Party Republicans to liberal Democrats recognizing the pressing need for an extension.
List of co-authors: Rep. Steve Chabot (R-OH), Rep. Bob Gibbs (R-OH), Rep. Chris Gibson (R-NY), Rep. Richard Hanna (R-NY), Rep. Joe Heck (R-NV), Rep. Jaime Herrera Beutler (R-WA), Rep. Bill Johnson (R-OH), Rep. Pat Meehan (R-PA), Rep. Steven Palazzo (R-MS), Rep. Jim Renacci (R-OH), Rep. Bobby Schilling (R-IL), Rep. Steve Stivers (R-OH).