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Wednesday, November 17, 2010

Wealthy Tax Cuts for Unemployment Benefits; Democrats Signal Compromise

Unofficial seal of the United States CongressImage via Wikipedia
Congressional Democratic Leadership,
signal willingest to make deals on
tax cuts, to extend unemployment
benefits.
Both Democrats and Republican leadership are signaling moves that the parties will compromise on extending the 2001 and 2003 era tax cuts, in exchange for extending unemployment benefits.

This is in contrast to statement by Tea Party favorite Michelle Bachmann (R-MN), given on November 16th to Good Morning America Correspondent George Stephanopoulos. On the program Bachmann stated she did not agree extending the unemployment benefits for up to 2 Million jobless Americans, stood be tied to extending tax cuts for those making over 250K a year.

“I would like to get the current tax policy extended as far into the future as we possibly can. If we can only get it extended for two years I think that is great but I don’t think that the American people should have to pay for that by having to have some new massive spending tied to it,” Representative Michele Bachmann, told Stephanopoulos

Senate Majority Leader Harry stated to Reuters, that he was willing to consider a temporary tax cut extension for all income levels.
 "This is something we will take a look at," Senate Majority Leader Harry Reid told reporters, referring to a plan to extend all the cuts for two or three years.
Still, some Democrats in the Senate are voicing caution on tying assistance for the nation’s unemployed job seekers to tax cuts for some of the wealthiest Americans.
"It really strikes me as hard to explain why we would give charity to the richest people in America with additional tax cuts of $100,000 a year and deny the basic necessities of life to people who are out of work through no fault of their own," said Senate Democratic Party Whip Richard Durbin (D-IL) to Reuters.
A deal on a temporary extension of the Bush-era tax rates would be tied directly to a renewal of unemployment benefits. The current jobless benefits act, HR-4213 “The Unemployment Compensation Act of 2010”, last signed into law by President Barback Obama on July 22.

If the act is not renewed by Congress, supplemental income payments for 800,000 Americans will expire on November 30. By the end of December, in total 2 million jobless American’s would stand to lose the supplemental income.

In the House, Representative Pete Sessions (R-TX), a Republican in leadership, said he could back extending jobless benefits, in exchange for an extension of all Bush-era tax cuts.
"What we're going to do is sit down and talk with Mrs. Pelosi," Sessions told Reuters as he left a meeting of House Republicans. "I see nothing wrong with her winning as long as the American people do."
President Obama, who will meet with Republican Party leadership at the White House on November 18th, has signaled willingness to compromise on the tax cuts with conditions. But, an initial vote for the legislation is not expected to come up until after next week's Thanksgiving break at the earliest.

Specifically, Obama wants to make the lower tax rates permanent for the middle class but, has cited that any extension for the wealthy must be temporary.

In a White House press conference on November 3rd, the President issued his strongest statement to date, on supporting additional benefit payments for the unemployed.
"It makes sense for us to extend unemployment insurance because, there are a lot of folks still out there hurting,” Obama communicated. "Extending Unemployment insurance is the right thing to do for folks who are struggling in this economy. It is the right thing to do, as a whole."
What are your thoughts on this article? Do you believe that the Democrat Party Congressional Leadership and the President, should give into Republican demands to tie much needed unemployment benefits, to tax cuts for the wealthiest Americans? Feel free to comment on this story below!
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