Now that the 12-member congressional “supercommittee” has announced its failure to produce an all-encompassing, deficit-reduction package before its Wednesday deadline, the full Congress faces deadlines of its own.
Before lawmakers pack up for Christmas, they must first decide whether to extend the payroll tax break and long-term unemployment benefits, both of which expire Dec. 31.
“I find it very hard to believe they would end the benefits all together,” said Dean Baker, the co-director of the Center for Economic and Policy Research. “I don’t think they want to have more people see more money pulled out of their paycheck come Jan. 1.”
President Obama jetted to New Hampshire today to urge Congress, or more pointedly, Republicans in Congress, to extend the 2 percent payroll tax cut that he championed last year. That lower rate, which Obama said put about $1,000 into the average American’s pocket in 2010, is set to rise back to 6.2 percent in 2013.
“If Congress refuses to act, then middle-class families are going to get hit with a tax increase at the worst time,” Obama said. “We can’t let that happen. Not right now. It would be bad for the economy. It would be bad for employment.”
In the president’s jobs plan, he not only extends the payroll tax cut, but further decreases the rate from the current 4.2 percent down to 3.1 percent.
“That isn’t a band-aid, that is a big deal,” Obama said, adding that the additional cut would save the average taxpayer $1,500 next year.
Obama’s American Jobs Act was blocked by Republicans in both the House and Senate. He has since tried to push pieces of it through Congress. After successfully passing a veterans’ benefits bill earlier this month, Obama said he will push for a vote on the payroll tax extension shortly after Thanksgiving.
“In the spirit of Thanksgiving, we are going to give them another chance,” he said Tuesday. “Next week they’re going to get to make a simple vote. To be clear – no, your taxes go up; yes, you get a tax cut. Which way do you think they should vote?
“Tell them ‘Don’t be a Grinch,’” Obama added, calling on the crowd to contact their Member of Congress. “Don’t vote to raise taxes on working Americans during the holidays.”