No help for 99ers in tax cut framework

[Joanne98]

For a good run-down of what's in the "framework" (it's not a deal, yet, but the outlines of one) that Obama announced, here's dday:

Just to outline this framework: under the deal, the Bush tax cuts for all rate levels would be extended for two years. The estate tax, in a monstrous deal, will be lowered from 2009 levels, with a $5 million dollar exemption and a 35% rate, for two years as well. And, the deal adds what is now an annual patch to the alternative minimum class so it doesn’t hit people in the middle class. In exchange, extended unemployment benefits between 26 and 99 weeks will be continued for 13 months, to the end of December 2011 (costing around $65 billion). A trio of tax cuts from the stimulus – the advanced Earned Income Tax Credit, the child tax credit, and the tuition tax credit known as the "American Opportunity Tax Credit," would be extended, I believe for a year, at a cost of $40 billion. A new tax cut, an employee-side payroll tax cut of 2% (out of the 6.2% that employees pay), would be in place in 2011, at a cost of $120 billion dollars. A senior administration official responded to my question by saying that would be paid for out of general revenue through a credit, and so would not impact Social Security and Medicare finances in any way. And, there are an array of business tax credits in the deal, including two that the President noted in September – bonus depreciation allowing businesses to write off at 100% the cost of new investments, and the R&D tax credit. Senior officials punted when asked if assurances for votes on other agenda items, like new START and repealing Don’t Ask Don’t Tell, were included in the deal.

Just focusing on unemployment benefits--this only funds the four tiers of benefits created thus far, up to 99 weeks of benefits. It does not create another, 5th tier for all of those people who have exhausted the 99 weeks they've received, the 99ers. There's now over two million in that category. Their number is expected to triple over the next year--there will be 6 million people who have exhausted everything by the end of next year.

The outlook of what that means for these individuals and the larger economy is ugly.

report released by the President's Council of Economic Advisers on Thursday . . . forecast that the exhaustion of unemployment benefits for so many will curb spending power enough to significantly impede an already weak economic recovery.

The typical household now receiving emergency unemployment benefits would see their income fall by a third should they lose their checks, according to the report. Among the roughly 40 percent of households in which the person receiving a check is the sole breadwinner, income would fall by 90 percent....

....Without an agreement to extend the program, the economy will lose about 600,000 jobs, as the spending enabled by continued unemployment checks ceases. National economic output--which expanded at an annual pace of 2.5 percent during the summer months--would fall off by 0.6 percent.

The long-term unemployed are on the verge of dropping off the political radar entirely. This potential agreement would probably seal their hopeless fate. A 13-month extension of the current tiers is likely the last we'll get for the unemployed out of this government.

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http://www.dailykos.com/storyonly/2010/12/6/926255/-No-help-for-99ers-in-tax-cut-framework