Republicans are united in calling for an extension of tax cuts for all Americans, while Democrats, including President Barack Obama, say the country cannot afford to extend tax cuts only for individuals who make more than $200,000 or married couples earning more than $250,000 annually.
The wrangling on Capitol Hill comes as the nation’s unemployment rate jumped significantly to 9.8 percent, according to a report released Friday morning by the Bureau of Labor Statistics.
According to the latest jobs data, there have been a net of 7.5 million jobs lost since December 2007, the first month of the recession.
Senate Majority Leader Harry Reid said he plans to hold two tax cut votes on Democratic proposals Saturday after a bipartisan deal to have four votes – two for each party – collapsed in the Senate.
The two Saturday votes will be on extending tax cuts for Americans earning under $250,000 a year and another from Sen. Chuck Schumer, D-N.Y., to raise the threshold to $1 million a year.
President Obama, before his surprise visit to Afghanistan on Thursday, also urged members of Congress to extend benefits for the unemployed, which expired Wednesday for about 2 million Americans. He expressed hope that lawmakers will come together on tax cuts even though Republicans and Democrats continue to squabble over both issues.
But Congressional Republican leaders are latching onto Friday’s disappointing US jobs report to bolster their argument that the economy is too shaky to let taxes rise for anyone, including millionaires and billionaires.
At least 44 percent of the members of Congress, both House and Senate, are themselves millionaires.
The White House is also using the jobs report to strengthen their economic arguments. Austan Goolsbee, chairman of the White House Council of Economic Advisers, said that Friday’s “numbers underscore the importance of extending expiring tax cuts for the middle class and unemployment insurance for those Americans who have lost their jobs.”
Obama’s Council of Economic Advisors on Thursday released a state-by-state breakdown on the economic ripple effect of letting long-term benefits expire.
If Congress doesn’t extend the benefits, seven million unemployed Americans could lose coverage by next November, the report stated.
The report showed “the consequences that inaction on extending unemployment benefits would have on American families,” a senior administration official said Friday.
“In December alone, more than two million Americans will lose the temporary support that helps them keep food on the table and make ends meet while they fight to find a job if Congress doesn’t act.”
The Labor Department estimates that federal unemployment benefits have kept 3 million Americans out of poverty during this financial crisis.
But if they are not extended by Dec. 11, 635,000 unemployed Americans will lose their benefits. By Christmas that number will escalate to 1.6 million and then almost 2 million by New Year’s Day. By the end of January, the agency expects about 3.25 million Americans will be cut off.
Most states fund at least 26 weeks of unemployment benefits, but the federal government has been offering an additional 73 weeks of help.
