As Americans prepared to celebrate the New Year, President Barack Obama celebrated the two-month extension of the payroll tax cuts set to expire Dec. 31. Now two weeks later, Obama has begun working to have these cuts extended until the end of 2012 in an effort to encourage economic growth and help struggling middle- and low-income Americans.
|PRESIDENT BARACK OBAMA
“We’ve been doing everything we can over the last few weeks to make sure that 160 million working Americans aren’t hit with a holiday tax increase on Jan. 1,” said Obama at a press conference Dec. 22. “Now, if you’re a family making about $50,000 a year, this is a tax cut that amounts to about $1,000 a year. That’s about 40 bucks out of every paycheck. It may be that there’s some folks in the House who refuse to vote for this compromise because they don’t think that 40 bucks is a lot of money. But anyone who knows what it’s like to stretch a budget knows that at the end of the week, or the end of the month, $40 can make all the difference in the world.”
The extension of the payroll tax cuts, signed by Obama Dec. 23, amounts to a difference of 2 percent between the current tax rate of 4.2 percent and the original rate of 6.2 percent. If the extension were not approved, more than 160 million workers would’ve seen an increase in the amount of taxes they pay to social security.
Obama is now working to pass an extension until the end of 2012 that would cost approximately $33 billion over 10 years. Congress plans to pay for the extension by increasing the fees charged to mortgage lenders by Government Sponsored Entities like Fannie Mae and Freddie Mac.
Republicans argue that an extension of the payroll tax cuts will contribute to the already increasing problem of the country’s dwindling social security fund. They also said that the cut will increase the nation’s overall deficit that recently reached more than $15 trillion.
“(Senate Majority Leader Harry Reid) and I have reached an agreement that will ensure taxes do not increase for working families on Jan. 1,” said Republican House Speaker John Boehner at a press conference announcing the initial compromise to extend the cuts. “We have fought the good fight. Why not do the right thing for the American people even though it’s not exactly what we want?”
Still several African-Americans throughout Pittsburgh and the nation are more concerned with how the payroll tax cut could help them over the next year. Many agree the extension of the tax cuts could help small business, struggling families and spur job growth.
“All I know is there are a lot of people in the city living paycheck to paycheck,” said Walter Clayton of Beltzhoover. “We’re already struggling to get by so how could you take away more of our money?”
“Thank God he even cares because the Republicans don’t. Heck they all have money; they don’t know how it feels to have $40 taken out of your paycheck. To me that’s a lot,” said Sharon Nelson from Atlanta. “That’s why Obama must be reelected or all those (who) aren’t rich will suffer.”