REFLECTIONS

Posted on November 27, 2011

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CONGRESS MUST WORK FOR US NOW

CONGRESSIONAL FAILURE IS NOT AN OPTION

After the super committee’s failure to reach a deficit reduction agreement, another tough budgeting task looms for Congress.

Impending expiration of federal payroll tax cuts, an unemployment benefit extension and the so called Medicare doc fix need to be taken care of now. The country’s fragile economy can ill afford failure this time.

Federal lawmakers cannot default to inaction. When they return from Thanksgiving break, they must begin the work o extend Social Security payroll tax break, worh an estimated $1,000 a year per family, for one more year.

And they must extend jobless benefits that provide those out of work with up to 99 weeks of support.

Both the payroll tax cut and extended jobless benefits expire January 1. Social Security payment should be extended to all workers, and the rich should not be receiving Social Security benefis. This will take care of the payroll tax deductions.

For every $1 “spent” on cutting payroll taxes, the nation’s gross domestic product (GDP) increases by up to 60 cents, according to the non-partisan Congressional Budget Office.

When it comes to increasing support for the unemployed, the return is much higher,  because each dollar spent on unemployment adds up to $1.50 to the GDP.

The other issue federal lawmakers must deal with is the Medicare provider fee. Congress passed a law in 1997 that set into motion automatic fee cuts if broad spending levels are exceeded.

If Congress fails to act, Medicare fees will be cut next year by more than 27 percent. These fee cuts would devastate the system. And while the Medicare system clearly needs to be overhauled to slow its growth and the costs, slashing the fees by such a magnitude is unacceptable.

The battle in Congress will be hot because of the differing ideas about how to pay for these measures. But compromise they must do or the economy will suffer a devastating setback.

Not acting on payroll tax cuts, unemployment benefits and Medicare would result in disaster.

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