With the end of the legislative year rapidly approaching, focus in Congress is turning from the failed super committee to the extension of the payroll tax cut.President Barack Obama said this summer that failure to extend the payroll tax cut as well as unemployment benefits before they expire at the end of the year “could mean 1 million fewer jobs and half a per cent less growth.”
Few expected the super committee to amount to any real agreement, and it was unlikely to ever have engaged in any sort of economic stimulus — which would have counted against its deficit-cutting target.
This failure was largely expected by the stock market — and most Americans — but it doesn’t speak well for Congress’ ability to agree on the payroll tax cut and unemployment benefits, which most believe will get done by the end of the year.
Rep. Jeb Hensarling (R-TX), one of the co-chairs of the super committee, said over the summer that he was open to allowing the payroll tax cut to expire.
“It’s always a net positive to let taxpayers keep more of what they earn,” he said, “but not all tax relief is created equal for the purposes of helping to get the economy moving again.”
But the Congressional Budget Office said last week that extending the payroll tax cut and unemployment benefits are precisely the sort of stimulus that will create the most jobs next year.
The House is only scheduled to be in session for eight more days this year after the Thanksgiving holiday, and it remains to be seen whether there is the political will — or even the ability — to reach an agreement on these measures before they expire on January 1st.
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