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Monday, December 6, 2010

Wealthy tax cuts for unemployment benefits; President Obama end game is confirmed

the 44th President of the United States...Bara...Image by jmtimages via Flickr
President Obama stands with adding
debt to the $13.7 Trillion deficit, to
have wealthy tax payers receive cuts;
while the unemployed wait on a 'deal'.
For 2 Million unemployed job seekers, President Barack Obama confirms that his end game is to request an extension of the Bush Era tax cuts of 2001 and 2003, for a one year extension of jobless benefits, according to The Hill.

A series of bills Democrats brought to an up on down vote in the Senate December 4th  failed. The bills included extending tax cuts to wage earners under $250,000 a year and under 1 Million dollar per year. President Obama did not make any statements, on Saturday, to either confirm or deny his support for either of these measures.

The compromise deal, would cost $1 trillion, which would make the measure more than the $800 billion cost of the Stimulus Act. Here is the math breakdown according to MSNBC:

  • Cost for extending Bush tax cuts two years: $800 billion
  • Cost for extending federal unemployment benefits one year: $60 billion
  • Making Work Pay tax credit extension: $62 billion
  • Extension of college tuition tax credits: $8 billion 
Ironically, the proposed deal does not include any language on the direct job creation tax credits, proposed in S.3706-“The Americans Want to Work Act”. Known as the “Tier V Bill”, the legislation would provide up to 20 weeks of unemployment compensation for job seekers who exhausted between 73-99 weeks of benefits. 

The bill, sponsored by Senator Debbie Stabenow (D-MI) would also include a $2000 tax credit, for employers –including wealthy tax payers- who hire the longest-term unemployed.

There are an estimated 6 Million “99ers” who have exhausted all forms of unemployment compensation. The S.3706 measure –to “Reach Out Job Search” blog knowledge does not have a limit to the number of tax credit one employer could receive for employing 99ers. And up or down vote on the legislation was subject to a stand-alone filibuster by lame-duck Senator George LeMieux (D-FL) on September 28th

Democrats in the House and Senate, including Speaker of the House Nancy Pelosi (D-CA) are expressing concerns on adding to the deficit helping wealthy tax payers, on the backs of many unemployment job seekers, who need to income to pay for basic needs like food, clothing and shelter.

"There are lots of people in our caucus who do have that appetite [to let all rates expire]," said Senator Chuck Schumer (D-NY).

Senator Tom Harkin (D-IA) confirmed to the Huffington Post, about talk in the Democratic Senate Caucus on letting the tax cuts expire. Also, Harkin did not rule out the caucus drafting another bill, after the new Senate and House is seated in January 2011, to make dents in any compromised legislation.

"We'll come back in January and we'll build our own [package]," he said. "That's right, that's a possibility that we could do. And maybe the pressure would be on a little bit more to address the real problem -- who's getting pinched on these taxes?” Senator Harkin stated.

An op-ed from The New York Times's leading economist Paul Krugman, notes that President Obama needs to tell the nation the truth about the Republican ‘blackmail’ on tax cuts for the wealthy.

"Mr. Obama should draw a line in the sand, right here, right now," wrote Krugman. "If Republicans hold out, and taxes go up, he should tell the nation the truth, and denounce the blackmail attempt for what it is.


What are your thoughts on this article? How do you feel, now it is confirmed that President Obama will compromise adding to the deficit to assist wealthy tax payers? Should unemployed job seekers be used as a pawn in this game? Feel free to comment on this story, below!
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1 comment :

Kevin said...

Dear Jesse,

This is a blog that you will want to see. "FEMA Camps For The Homeless."

http://fema-for-homeless.blogspot.com/

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