Obama to Sign Bill Extending Unemployment Benefits by 20 Weeks
This is just crazy.
I guess this is what they mean by a “jobless recovery:” Give money to the unemployed; they will continue to be able to spend money to help keep the economy artificially inflated, which will keep businesses going so that they can hire more workers…
Interesting “trickle up” theory. However, it forgets one basic fact of human nature: Laziness. If you are going to pay someone to just sit at home, what do you think they are going to do? Look for a job? Not likely! Sure, a percentage of them will be self-motivated individuals who will continue to look for a decent job, but the lion’s share of them will just sit at home and collect unemployment, only to start looking for work when their unemployment check is finally about to run out. Of course, by that time, the unemployment rate will have continued to climb and Congress will probably extend the unemployment benefits, yet again; The vicious cycle begins anew.
Also, even though your Congresscritters and Senators aren’t saying it, this IS another “Stimulus.” Take note of how your Representatives voted. Odds are, they voted for it. As for your Senators, they ALL voted for it:
Obama to Sign Bill Extending Homebuyer Credit, Jobless Benefits
By Brian Faler
Nov. 6 (Bloomberg) — President Barack Obama is set to sign into law a bill that extends $8,000 tax credits for first- time homebuyers and unemployment benefits.
The measure also provides tax refunds to money-losing companies.
The House approved the legislation yesterday on a 403-12 vote; the Senate passed it 98-0 on Nov. 4. White House spokeswoman Jen Psaki said Obama will sign the bill today, the same day the Labor Department is slated to release an update on the nation’s jobless rate.
The measure extends until April 30 the homebuyers tax credit that would otherwise expire at the end of this month.
“The homebuyers’ credit has helped pave the way for stabilization in the housing market and contributed to three consecutive months of rising home prices,” said Representative Jim McDermott, a Washington Democrat. “Its extension will continue to make homeownership more affordable and bring confidence to a housing market and economy that remain fragile.”
The jobless will get as many as 20 additional weeks of unemployment assistance, depending on where they live.
Companies will be given expanded ability to apply losses to previous years’ income, allowing them to qualify this year for $33 billion in tax refunds, according to Congress’s Joint Committee on Taxation. The legislation also includes a tax break to help victims of Bernard Madoff’s multibillion-dollar Ponzi scheme.
The bill, the first major expansion of provisions in February’s stimulus package, is estimated to funnel $45 billion into the economy in the 2010 fiscal year.
With unemployment projected to average 9.85 percent next year, according to a Bloomberg survey of economists, lawmakers are considering spending billions more to extend other elements of the stimulus package. Among them are subsidies to help the unemployed buy health insurance.
McDermott said lawmakers will probably move to approve additional extensions of jobless benefits to help the unemployed through much of next year, at a cost he predicted could reach $80 billion.
More than 1.4 million Americans have claimed the homebuyer credit at a cost so far of about $10 billion, according to the Treasury Department.
Under the new bill, couples earning up to $225,000 a year and individuals earning up to $125,000 will be eligible for the credit. That’s up from the current $75,000 limit for individuals and $150,000 for couples.
The bill also will allow homebuyers who have owned their prior residence for at least five years to receive a $6,500 credit, an expansion of the program. Those who sell their new home or no longer use it as their main residence within three years would have to repay the credit. Homes worth more than $800,000 wouldn’t be eligible.
A Nov. 3 Goldman Sachs Group Inc. report said most of those who claim the credit would have bought homes without the program. It estimated the initiative spurred 200,000 home sales that otherwise wouldn’t have occurred.
Extending the credit to those who already own homes won’t reduce the excess inventory of housing blamed for the slump because “every buyer taking advantage of the move-up credit would necessarily be a seller,” the Goldman Sachs report said. It said the plan may increase housing prices by 1 percent because “sellers are likely to incorporate a fraction of the credit amount in their sale prices.”
House Majority Leader Steny Hoyer, a Maryland Democrat, called the jobless provision “an investment that pays off for all of us” because “money provided by unemployment insurance quickly goes into necessities and boosts local economies.”
The legislation would provide 14 additional weeks of unemployment benefits in all states, plus another six weeks in states with jobless rates topping 8.5 percent.
More than one-third of the nation’s unemployed have been out of work for at least six months, according to the Labor Department. About 1.9 million Americans will exhaust their benefits, which average $300 per week, by the end of this year without the bill, the agency said.
Representative Kevin Brady, a Texas Republican, said the provision allowing tax refunds for companies will provide “an immediate cash infusion to struggling businesses” and “free up additional payroll to help get more Americans back to work.”
The provisions were recommended by White House economic adviser Lawrence Summers, said Representative Richard Neal, a Massachusetts Democrat.
Representative Lloyd Doggett, a Texas Democrat, criticized the plan as a “corporate giveaway” to “those with good lobbyists.” If it were a good idea, he said, why not offer it “to workers who have lost their jobs and give them back some of the taxes that they paid when they had a job?”
The bill won’t add to the budget deficit, according to congressional estimates, in part because it would be financed by delaying until 2018 a tax break for multinational corporations related to taxes they pay abroad. The legislation would also extend a 0.2 percent employer payroll surtax that otherwise would have expired at the end of the year.
That provision drew complaints from the U.S. Chamber of Commerce, the National Federation of Independent Business and other business groups that said in a letter it “would increase the tax burden on employers just as they are deciding whether to add employees in 2010 and 2011.”
The bill is H.R. 3548.Explore posts in the same categories: Economics, Obama Sucks, politics