Economic Recovery Plan May Fatten Take-Home Pay for Workers

Economic Recovery Plan May Fatten Take-Home Pay for Workers
By Richard Rubin, CQ Staff


After this year’s deluge of tax-rebate checks failed to ease the economic drought, congressional leaders seem likely to try the steady-drizzle approach, doling out a new round of middle-class tax cuts through changes in workers’ paychecks.

Besides delivering on a campaign promise, President-elect Barack Obama and congressional Democrats also will be conducting an economics experiment: Will people spend more if they get an extra $10 at the end of each week than if they get $500 in the mail? The answer should be clear by late 2009.

Lawmakers will set the parameters for the real-world test during the upcoming debate over economic recovery legislation, which the leadership hopes to have ready for Obama soon after he takes office Jan. 20. The details of the bill are still unclear, but it is likely to include a version of the tax cut that Obama proposed during the campaign. He called for an income tax credit that would cover the first $500 in payroll taxes paid by each worker for Social Security and Medicare coverage.

Transition officials and lawmakers aren’t saying exactly who would get the tax cut, when it would start appearing in paychecks or how long it would last before it would need an extension to become permanent law. But they have signaled they do not want to send out another round of rebate checks, preferring to change withholding tables so the government gets less from every paycheck.

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http://www.cqpolitics.com/wmspage.cfm?parm1=5&docID=news-000003001686

yep, that will turn things around!!! LMAO!!! we are SO fucked!!!

I socked away the 500 bucks in my sons savings account. However, I'm more likely to incrementally ratchet up my spending with a small, reliable increase.

Hundreds of thousands DON'T.

So what is this ten bucks a week going to buy them? A grander parking space for the car they are forced to live in due to the foreclosure? :sarcasm:

but it is just one part.

so, it's not a fair criticism.

I was talking about whether or not a given program would be macro-economically effective at rebooting the economy. My argument was that a temporally broad, but momentarily shallow stimulus is more effective than a temporally focused but deep stimulus, or at least seems to have a better shot.

You were talking about something different. When you have something to add to the point I was making, maybe I'll engage you. Otherwise, don't bother.

That is what ten dollars a week is...

Because if this is an indication of what they are planning to do -- we are well and truly fucked.

Banks get BILLIONS, but the middle class gets nickles and dimes. Should we all just kneel outside of the White House with hat in hand, waiting for the politicians to toss out the coins?

Lets face it, its going to take years to recover from this mess created by republicans..I for one am not going to hold my breath waiting for the news that the economy has somehow recovered anytime soon..

will all get left out? Sounds like a great start :sarcasm:

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Do you honestly believe this proposal is all that is involved in Obama's stimulus plan? A major part of his plan is distribution of funding to States and municipalities for local projects such as roads, airports, bridges, etc. which will create jobs for the unemployed and opportunities for the self employed. And this is all in conjunction with tax cuts for the middle class and some form of National Health Care relief.

stimulus checks, I got one, just like everyone else.

Given that there are 18.5 million self employed per the last census and who only knows how many actual unemployed in this country right now - there are some other options for putting this money back into the economy that aren't being addressed. Just like a tax cut, that's great for next April when I do my taxes, but again, isn't going to do anything for folks like me in the meantime.

And nowhere did I ever mention thinking this was the only thing in a stimulus plan, which you would have noticed if you'd been paying attention.

When Republicans try to stimulate the economy they give breaks to the wealthy supposedly so they will go out and buy lots or hire more people. That doesn't happen. They invest the money in stocks bonds and foreign currencies. The USA has spent lots of money with zero to show for it. When Democrats try and stimulate the economy they invest in infrastructure which in turn creates jobs, and they give breaks to the ones that really need some breaks. Those people have no choice but to spend every penny they get because they pretty much live from paycheck to paycheck, so the money goes directly back into the economy. $10. a week may not sound like much but I would much rather we do this than give Exxon four billion in tax breaks, which is what the Republicans are fighting for. By the way ten dollars a week amounts to a $.25 an hour raise in pay. Another really good part about doing it this way is it really helps small business. It makes for less payroll taxes we have to pay every week....

is a great idea but in the short term it will have little effect, reason: it takes TIME to get these kinds of projects up and running! we may indeed be able to create several million new jobs with such a plan but in the many months it will take to get projects up and running to full employment levels additional millions of jobs will be lost! we are swimming against a rising tide!. dont get me wrong, I am all for infrastructure improvements but i do not believe it will be enough to bailout the economy. unemployment levels will continue to rise and high levels of unemployment will be the norm for years to come, this issue must be addressed.

The planning process has been completed and they have just been put on hold for lack of funding. A huge impact will be almost instant. Granted there will be other major projects that will take some time, especially as we delve deeper into "green" technologies.

is in state hands. Which means they are getting cut due to shortfalls in state budgets. NY has already decided to postpone, possibly eliminate around $5 billion in construction jobs. So the federal government will have to implement most of these new infrastructure spending plans as almost all states are having budget cuts to their programs.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4728571

Oh, can't do that. Don't want to appear fair, or worse yet "SOSHULIST", or step on any toes!