COMMENTARY | MSNBC reports that on Feb. 17, the House and Senate approved the payroll tax cut extension, which will now to go President Barack Obama for his signature. The vote in the House was 293 to 132, and 60 to 36 in the Senate. There are a lot of positive things in the payroll tax cut extension, which can help stimulate the economy. As an American citizen concerned with the economy and the national debt, here are three important things that are included in the extension.
One of the most important aspects of the legislation is that unemployment payments would be extended 10 months, but with a catch. The unemployment benefits would be cut down to 63 weeks in states where the unemployment is equal to the national average of 8.3 percent. However, unemployment benefits would be increased to 73 weeks, in states where unemployment was higher than 9 percent. Right now, the unemployment benefits are available for 93 weeks, so unemployment benefits will be drastically reduced. Reducing the number of weeks that an unemployed person would be able to collect benefits is more likely to make him or her look harder for a job, and will also help cut government spending.
Social Security payroll tax will be kept at 4.2 percent, which is better than the normal 6.2 percent. This means that people in the workforce will be seeing the same amount taken out of their paychecks for Social Security, as opposed to a 2 percent increase. This is a very important piece of the legislation, since it can help the economy grow, and can help people save more money out of their paychecks. If the Social Security tax would have been raised back up to 6.2 percent, people would be paying an average of $1,000 more each year into Social Security, which would significantly hurt the fragile economic state. More people will be willing to spend money knowing this tax will not increase, which will help the economy stabilize.
Federal employees will also have to pay more toward their pensions, with a 2.3 percent hike in contributions. This increase on federal workers will bring in $15 billion over 10 years, which can help reduce the size of the national debt. I 100 percent agree with this, since most of the time, federal employees make more money doing their job than someone in the private sector. You hear all of the time about how good the pensions are of federal employees, and it is not right that they do not have to contribute as much into the benefit plans. If federal employees are making more money than private employees, it is only fair that they pay more into their pension. Usually federal employees have a better pension plan anyways, so they should be contributing more into it, and not making other citizens pay for their benefits. This is important because of the fact it will bring in money to the government, which can be used to pay bills.
Myself, Personal Opinion
Tom Curry, “Congress Passes Payroll Tax Cut Extension”, MSNBC