Payroll Tax Cut Rallies for Bipartisan Agreement

A deal is headed towards congress for approval on Thursday. Democratic and Republican leaders are rallying for support for the bipartisan agreement. If approved it could mean payroll tax cut for 160 million U.S workers in 2012. This would also be a victory for Obama and his fellow Democrats.

The deal is expected to be approved by both the Senate and the House of       Representatives. This package includes renewing expiring jobless benefits for millions of long-term unemployed and preventing a steep pay cut for doctors who treat the elderly Medicare patients. With Congressional approval Obama would be able to sign the $150 billion package in to a law by February 29th. That is, before the tax cut and unemployment benefits expire. This payroll tax cut could give an average family up to a $1000 extra this year. The workers would also continue to pay 4.2 percent in the Social Security retirement system instead of 6.2 percent.

John Boehner, the House Speaker said this is a fair agreement. He said this is essential to counter the president’s failed economic policies. He also said, this is strictly an economic relief package and we cannot expect this to grow the economy or create jobs.

The senior aides of both the parties are confident about the bipartisan agreement. A republican aide went on say they cannot afford to oppose tax cuts as they belong to the part to tax cuts. The Democrats will be happy about the fact that they were able to prevent any cuts in Medicare benefits. So, most of the House Democrats will be ready to vote for the bill.

But, Steny Hoyer opposes the deal because a cost saving provision means federal workers have to pay more in to their pension plans. He also said, the country has to stop targeting these hardworking men and women and that everybody has to pay their far share. There are many federal workers in his Maryland district.

Economists predict that the tax cuts and jobless benefits will lift the economy. But letting them expire will mean shaving 0.7 percent point off economic growth this year. Though republicans have raised issues saying this package benefits the wealthy and not the middle-class American, it does seem like the there will be an agreement from both sides.

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