Earlier this week, President Obama laid out a framework for a compromise with Congress that ensures that middle-class families don’t get a tax increase, extends unemployment benefits for folks who are looking for work, and gives our economy a shot in the arm.
Like anything in Washington these days, there are a lot of opinions about this flying around. But it's always important to start with the facts. To help you understand exactly what is in this framework Austan Goolsbee, one of the President's chief economic advisors, took some time to break it down:
There are some things in this agreement you'll like and some things in here you might not. There are things in here that the President and I don’t like – like the temporary extension of tax breaks to the wealthiest 2 percent of Americans and a more generous treatment of the estate tax than is warranted.
But what is at stake is the strength of our recovery and much needed relief for middle class families. The bottom line is that if Congress does not act to extend unemployment insurance, 2 million Americans will lose their unemployment insurance this month alone. And if we don’t extend middle class tax cuts, millions of families will see a spike in their tax bill when they can least afford it.
With that in mind, President Obama reached across the aisle to ensure that middle class families get a fair shake. Here are a few important points:
- No tax hike for middle class families. This proposal would prevent a tax increase of over $3,000 for the typical family.
- Money in your pocket through a reduction in the payroll tax. About 155 million workers will see a 2 percent reduction in their payroll taxes and American families can take advantage of the Child Tax Credit, Earned Income Tax Credit, and the American Opportunity Tax Credit.
- Extension of unemployment benefits. Folks who have been looking for work in these tough times won’t lose their lifeline. This is also good news for local economies because unemployment insurance dollars are among the most likely to be spent quickly.
Vice President Joe Biden