The President reached a deal with GOP leadership Monday evening concerning the Bush-era tax cuts and unemployment benefits. This blog has spoken extensively about the futility of extending tax cuts for the super-rich during the Great Recession, as well as other, more productive places that money might go (think education or clean energy). But those days of dreaming are over because the deal extends Bush-era tax cuts for everyone for the next two years.
The good news is that the deal also supports extending unemployment insurance for the long-term unemployed for another 13 months. If passed, extending these benefits would not come up for debate again until February 2012 when hopefully, with much work and investment, our country will be boasting a much lower unemployment rate.
Also included in the deal is a 2% employee payroll tax cut, a revival of the estate tax cut (with exemptions up to $10 million for couples), and several tax credits aimed at working families were extended. These tax credits include the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit, which were all scheduled to expire this year.
Shaillagh Murray of the Washington Post reported that the President is urging Democrats to support the agreement in Congress, “In brief remarks Monday evening, Obama said he was disappointed that the deal would extend breaks for the wealthiest households, but he warned Democrats not to make good on threats to allow all the cuts to expire, as an expression of the party’s opposition to preserving the top-rate cuts. “Sympathetic as I am to those who would prefer a fight to compromise, it would be the wrong thing to do,” the president said. “The American people didn’t send us here to wage symbolic battles.”
Ezra Klein of the Washington Post agrees, “it’s something of a hopeful sign: The White House sat in a room with Republicans and Democrats and managed to negotiate an actual compromise. The final deal includes some things that Democrats will like and some things they won’t like, and it includes some things Republicans will like and some things they won’t like. But it’s a deal, and a better one than many — myself included — thought they’d reach.”
At least with the holidays just around the corner, the long-term unemployed are not left worrying where there next check is coming from.