Jobless aid will end

A tax cut that 160 million Americans and government support for long-term unemployed will expire at the end of the year _ sucking $ 165 billion by next year the economy _ unless Congress intervenes.
Economists hope that the so-called super-Conference Committee decided to extend both measures. But the committee can not even agree on how his main goal, cutting $ 1.2 trillion federal budget deficit.
If the elimination of the tax costs the average family about $ 1,000 more in taxes next year, the equivalent of an extra tank of gas every two weeks. A person who earns $ 100,000 would pay $ 2000 more.
And if the long-term unemployment benefits expire, would have lost about 6 million people, weekly checks average about $ 300. For most long-term unemployed, which is their main source of income.
"There is so much uncertainty to the future," said Michael Hanson, senior U.S. economist at Bank of America Merrill Lynch.



Both changes would have left Americans with an estimated $ 165 billion less to spend. The Federal Reserve expects the economy to grow 2.7 percent next year, and economists say the end of the two programs can reduce the growth of a full percentage point.
The government said Tuesday that the economy grew at 2 percent rate in July, August and September, compared with previous estimates of 2.5 percent.
To reduce unemployment significantly reduced, the economy must grow more than twice as fast as it grew this summer.
Congress could extend the tax cuts and unemployment benefits when they return from the cavity of Thanksgiving next week. But part of the same philosophical differences that sank the super-committee could complicate the debate.
At the same time, Congress is not willing to enforce what is essentially a tax increase on tens of millions of Americans, just like an election year begins.
Both measures were part of an agreement reached in December 2010 from President Barack Obama and Republicans in Congress.
The section applies to the tax that pays for Social Security. The tax applies to the first $ 106,800 of a person makes in a year. The agreement reduced the rate paid by individuals to 4.2 percent from 6.2 percent this year. Companies also pay a rate of 6.2 on their payroll.
Some Republicans said they would support the expansion of the tax, but almost certainly a discussion on how to pay. Without spending cuts or tax increases, the renewal fee inflate the social security deficit.
Obama, as part of its bill of jobs in the month of September, Obama has proposed lowering the rate further to 3.1 percent, and cutting off the part of the employer to 3.1 percent in the first five millions of dollars on their payrolls.
Cuts at that level would pump 250 billion dollars more than the economy last year, when individuals and employers both pay 6.2 percent interest.
Obama spoke Tuesday in New Hampshire, urged Republicans to set the pause to continue.
"Do not be a Grinch," the president said. 'Do not vote to increase taxes on working Americans during the holidays. "
Monday ', White House press secretary Jay Carney suggested that the renewal and deepening of the fee can be paid for by increasing taxes on the rich. The Republicans have refused to consider doing.
Most countries offer up to 26 weeks of unemployment benefits. The agreement extended the benefits to 99 weeks in countries with the highest unemployment.
Unless it is renewed, nearly 2.2 million people unemployed losing benefits within the first week of February. About 6 million people would lose benefits each week at the end of the year.
The absolute uncertainty of not knowing what will the Congress could cause companies to continue taking and investment, thereby dragging down economic growth, Hanson said.
Most economists lower budget deficit, but most want the government to gradually reduce the deficit, to avoid damaging the economy weak. It would all be fairly robust economic growth to the problem.
The Committee default super-trigger automatic cuts in the $ 1 trillion of public spending from 2013. Congress could undo, but the rating agencies may downgrade the government's long-term debt, such as Standard & Poor's has done in the month of August.
An even bigger obstacle lies at the end of 2012. This is when the tax cuts passed during the Bush administration in September expired. Losing the tax cuts would cost taxpayers an additional $ 4,000 billion over 10 years.
Together, these factors would reduce the growth in 2013 between 1.5 and 3.5 percentage points, Douglas Elmendorf, director of the Congressional Budget Office estimated last week.