Thursday, February 23, 2012
U.S. passes payroll tax cut
From The Hindu
After months of haggling the Congress has agreed a proposal for extending President Barack Obama's payroll tax extension and unemployment benefits package for the rest of the calendar year, handing the administration an election-year victory and bringing relief to over 160 million middle-class Americans.
While Republicans have secured a partial success in the negotiations by not compromising on Mr. Obama's request to end tax breaks for millionaires, the breakthrough in Congress this week is likely to buoy the President's prospects heading into the November presidential elections. The latest deal will also help prevent a pay cut for doctors who accept Medicare patients.
Speaking earlier this week Mr. Obama had pressed Congress to agree the stimulus-like package saying, “When a plane is finally lifting off the ground, you don't ease up on the throttle. You keep the throttle on full. You keep going. And our plane is up there, but we're not at cruising altitude yet.”
Yet it is unlikely that the payroll tax cut deal alone will see the economy through its post-recession woes. Experts argued that given the absence of additional revenue from a higher tax rate for the wealthiest Americans, this week's tax cut would likely add $100 billion to the federal deficit. Combined with continuing economic instability in Europe the overall downside risks to the U.S. economy may still be high.
High deficit levels notwithstanding Mr. Obama continued to train his guns on boosting infrastructure and education-sector investments and putting more money in the pockets of ordinary Americans. At a briefing on Tuesday he said he had released a blueprint for an economy “built on new American manufacturing, and new American energy sources, and new skills and education for American workers, and a new focus on the values that are the bedrock of this country.”
After months of haggling the Congress has agreed a proposal for extending President Barack Obama's payroll tax extension and unemployment benefits package for the rest of the calendar year, handing the administration an election-year victory and bringing relief to over 160 million middle-class Americans.
While Republicans have secured a partial success in the negotiations by not compromising on Mr. Obama's request to end tax breaks for millionaires, the breakthrough in Congress this week is likely to buoy the President's prospects heading into the November presidential elections. The latest deal will also help prevent a pay cut for doctors who accept Medicare patients.
Speaking earlier this week Mr. Obama had pressed Congress to agree the stimulus-like package saying, “When a plane is finally lifting off the ground, you don't ease up on the throttle. You keep the throttle on full. You keep going. And our plane is up there, but we're not at cruising altitude yet.”
Yet it is unlikely that the payroll tax cut deal alone will see the economy through its post-recession woes. Experts argued that given the absence of additional revenue from a higher tax rate for the wealthiest Americans, this week's tax cut would likely add $100 billion to the federal deficit. Combined with continuing economic instability in Europe the overall downside risks to the U.S. economy may still be high.
High deficit levels notwithstanding Mr. Obama continued to train his guns on boosting infrastructure and education-sector investments and putting more money in the pockets of ordinary Americans. At a briefing on Tuesday he said he had released a blueprint for an economy “built on new American manufacturing, and new American energy sources, and new skills and education for American workers, and a new focus on the values that are the bedrock of this country.”
Labels: Barack Obama, US economy
# posted by Narayan Lakshman @ 1:43 PM 
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