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Coming Together On Tax Cuts and Unemployment Benefits

The Obama administration has come to somewhat of a happy medium with Republicans on extending both tax cuts - and unemployment benefits - for millions of Americans.

Tax Cuts And The Federal Budget

The president said during his campaign that he originally planned tax cuts for the 'middle class' (a term that needs further defining in this current economic climate), but has since changed his stance.

"It would be a grave injustice to let taxes increase for these Americans right now.  And it would deal a serious blow to our economic recovery", the president said yesterday in remarks to the press.



Both parties voted to extend Bush-era tax cuts (for two years) while extending unemployment benefits for 13 months. 

Without the tax cuts Americans could see their taxes rise beginning January 1, 2011.

"I am not willing to let that happen.  I know there’s some people in my own party and in the other party who would rather prolong this battle, even if we can't reach a compromise.  But I'm not willing to let working families across this country become collateral damage for political warfare here in Washington.  And I'm not willing to let our economy slip backwards just as we're pulling ourselves out of this devastating recession."

The White House is explaining the benefit of extending the tax cut like this, "
"The framework agreement includes a mutually agreed upon solution to the impasse over taxes by extending the 2001/2003 income tax rates for two years and reforming the AMT to ensure that an additional 21 million households will not be hit with a tax increase. These measures will provide relief to more than 100 million middle-class families and prevent a tax increase of over $2,000 for the typical family."
and states the measure has three key components that (1) will ensure that working families will not lose their tax cut; (2) focuses on high-impact job creation measures, and (3) does not worsen the medium- and long-term deficit.

As for the extending the unemployment benefits in a climate that has seen record unemployment numbers across the country, the White House says extending unemployment benefits will "create 600,000 jobs in 2011. "

The White House is reporting that had these benefits not been extended 2 million workers who would have lost benefits. 
 
The decision was made before the Holiday recess, and the new year.  One sure to bring relief and merriment to millions of Americans this Holiday season.  (Maybe not so much, however to the extremely wealthy segment of the American population).

Senior Administration Officials will hold a background briefing call today at 6:45 p.m (EST) to provide an update on the tax cuts and unemployment insurance. 

_______

Question of the day:  If America's wealthiest are paying the most in taxes, why is there still homelessness and hunger in America?  What is the U.S. government doing with all that money where we, the richest country on the planet, can't feed and house every American?  No more homelessness in five to ten years? I say no more homelessness today!

Related
You and Your Money
Bush-era Tax Cuts. What does it all mean, really?
The president's additional remarks to the press

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