President Obama Urges Action on Unemployment Benefits, Tax Cuts

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The report shows "the consequences that inaction on extending unemployment benefits would have on American families," a senior administration official said earlier today. "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.

Congressional Republicans argue that the cost is too high and that lawmakers need to review other budget cuts and extending tax cuts before discussing the benefits.

Lawmakers are walking a tight rope because while the benefits extension would add considerably to the already burgeoning U.S. budget deficit, it would help the economy in the short-term by putting more money into the system, some economists say.

"The emergency unemployment insurance program puts $5-6 billion into the economy each and every month so you tote that up over a year that's $80 billion. That's a lot of money," said Moody's economist Mark Zandi.

Unemployment nationally is at a staggering 9.6 percent, and although the job market is improving slowly, millions of Americans still rely on federal and state benefits to keep them financially afloat.

New applications for unemployment aid rose last week by 26,000 to 436,000, according to a Labor Department report released today.

Congress Spars Over Unemployment Benefits, Tax Cuts

House lawmakers today voted on extending the Bush-era tax cuts for the middle class while letting tax cuts for high-income Americans expire on Jan. 1. House members approved the extension of tax cuts for individuals making less than $200,000 and couples making less than $250,000.

Even though the bill passed the House, experts say the move is more a symbolic gesture on the part of House Democrats.

Meanwhile, Senate Republicans -- in their own show of symbolism -- have refused to work on any other legislation until the chamber finds common ground on tax cuts.

"It's time Democrats put the priorities of the voters first," Senate minority leader Mitch McConnell, R-Ky., said in a statement today. "At the end of the month every taxpayer suffers a pay-cut unless we stop it. But Democrats would rather spend the Senate's limited time on Don't Ask Don't Tell and Immigration. They'd rather come down to the floor to talk about filibuster rules."

Some Changes Taxpayers Can Expect If Tax Cuts Expire

-The lowest tax bracket, currently 10 percent, will rise to 15 percent--in effect, a 50 percent increase.

-Reinstatement of the so-called marriage penalty: Married employees will no longer have relief through the 15 percent tax bracket but will pay more than two single individuals with the same income.

-The child tax credit -- currently $1,000 for families with a child under 17 -- will drop to $500.

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