REPORT: Debt Ceiling Deal Will Cost 1.8 Million Jobs In 2012

The Economic Policy Institute, a top nonpartisan think tank, estimates that the deal struck this weekend to raise the nation’s debt limit will end up costing the economy 1.8 million jobs by 2012. Today the Senate is expected to approve the package passed yesterday by the House and send it to President Obama. But while the unemployment rate remains above 9 percent, the deal does nothing to address chronic joblessness.

The agreement would reduce spending by at least $1 trillion over 10 years, but even the near-term cuts could shrink already sluggish GDP growth by 0.3% in 2012. According to EPI, the plan “not only erodes funding for public investments and safety-net spending, but also misses an important opportunity to address the lack of jobs.” In particular, the immediate spending cuts and the “failure to continue two key supports to the economy (the payroll tax holiday and emergency unemployment benefits for the long term unemployed) could lead to roughly 1.8 million fewer jobs in 2012.”



http://thinkprogress.org/economy/2011/08/02/285599/report-debt-ceiling-deal-will-cost-1-8-million-jobs-in-2012/

we will have a Republican president in 2012.

And sadly, Obama could have prevented this, even up until Sunday. The 14th amendment option.

Consider .... turn the question around ... did the payroll Tax Holiday CREATE 972,000 jobs this year? So what makes anyone think that getting rid of it is going to COST 972,000 jobs?

But fhe POLITICS are clear, we need that man out of the WH... (And IMHO he is helping along )

better than most stooges... He slugs himself and the party a few times for good measure before he hits the mat, every time.. He will swear he's a Democrat til doomsday because it's in the script..

Wealth Addiction has lead America here. $$ can buy anything. The empty wealthy try to fill their cavernous holes with money because Honesty, Love, Empathy and Modesty BURN when they get near it.

It is more important that the Very Rich become Filthy Rich than it is for America to remain a nice place to live.

do not forget this

He really screwed up this time. It wasn't the right thing to do, and he got NO political benefit from it at all. Zero.

yup

He didn't accept the plan? huh?

They raised the Debt Ceiling - that they did not want to raise - and got it raised to 2013 - which they did not want either

They did not get a Balanced Budget Amendment

They did not get cuts to SS and Medicare

They did not get an extension of the Bush Tax cuts - they will expire in 2012

They got big cuts to Defense

Tax increases are on the table

among others

try again

yup

But default would have been worse

yup

So it's jumping the gun a bit.

I think THAT is jumping the gun a bit...there's a better chance the sun will rise in the West than there is of this Congress extending UI...

And they shouldn't suggest that either has been resolved by the debt agreement, when they haven't been.

I'm not saying they will be extended. I am saying that a decision has not yet been made not to extend them.

Several states have already eliminated existing tiers of extended unemployment benefits in recent months. I don't think it's safe to assume there will be further extensions.

Either or both of which might turn out to be false.

New America demands serfs.

It's the new Slavery.

that's why I am against extending it, and I don't buy a trickle down argument that we need regressive tax cuts to stimulate the economy.

The EPI should know better than to endorse such a steaming pile of crap.

A cut to a regressive tax like the payroll tax, by definition, has "progressive" effects in the sense of benefiting the poor and the middle class more than the rich.

check out this analysis by Citizens for Tax Justice http://www.ctj.org/pdf/taxcompromise2010.pdf page 3 there is a table, it shows.

The bottom 40% get a mere 12.1% of the total tax cut. Whereas the top 10% get 26.7% and the top 20% get 46.4% and the top 40% get 72.7%.

72.7% for the top 40% versus 27.3% for the bottom 60% does not at all fit my definition of progressive. The top 20% get almost twice as much as the bottom 60%.

Now, what Reich has proposed - a payroll tax holiday on the first $5,000 or $8,000 of income would at least be neutral, giving the same dollar amount to almost everybody, but still doing nothing directly for the people who are really hurting - those without jobs.

So I think it is disgusting to see Obama propose it and sad to see the EPI support it. It's just another version of trickle down Reaganomics.

Income taxes hit high incomes at higher rates, not just higher absolute amounts, than low incomes. Why? Because, even though 2% of a rich person's income is much more in dollar terms than 2% of a poor person's income, poor people need the money a whole lot more than rich people. So a blanket percentage tax cut for all people has progressive effects, i.e. it helps poor people more than rich people.

Now, I agree, that payroll tax cut would be better if it spent the same amount of money, but directed it more specifically at low-income families. That would both be better stimulus (because more of the money would be spent rather than saved) and better in terms of social justice (because it would mean that the money went to those who needed it most.) But the fact that there is a better option doesn't change the fact that the payroll tax cut is a real help both to our economy and to the working families whose income it supplements. And it also doesn't make it regressive, which it simply isn't.

in what universe? 26.7% of the benefits going to the top 10% versus 12.1% going to the bottom 40%?

If that's progressive, then you might as well agree with Bush that his tax cuts were progressive, because even though the rich got far more than the poor or working classes, the lower classes got more AS A PERCENTAGE of their tax bill.

Granted, this proposal is not AS bad as the Bush tax cuts, but it is still disgustingly bad. $52 billion goes to the top 20% while $13.6 billion goes to the bottom 40% and you think that is not regressive because of some sort of Bush-type logic?

To me that is the very definition of regressive when the rich get four times as much as the poor even though there are twice as many of the poor.

Again, that's the whole principle of progressive taxation. If you're right, then a flat tax is a progressive tax, because it takes far more away from the rich in absolute dollar terms than it does from the poor.

The Bush tax cuts are a separate issue, because they were meant to be long-term: that means they would be funded either through long-term deficits (which hurts income growth and therefore middle-class and working people, and would have to be paid for by later taxpayers anyway) or by cutting government spending (which hurts middle-class and working people much more than it hurts rich people.) The payroll tax cut is instead funded through short-term deficit spending, which reduces unemployment and improves growth in the midst of a recession.

if you are right, then CONVERSION to an unfair tax is NOT regressive because it will cut taxes more for the poor than for the rich, at least on a percentage basis. As long as the poor get $100, who cares if the rich get millions? $100 means more to a homeless person than $100,000 means to the Koch brothers. :crazy:

We are talking about changes to the system, not the system itself. Changes that provide bigger benefits the higher you go up the ladder. I've proven that.

A quarter probably means more to me than $2,000 means to Bill Gates, but you do not give people like me a quarter and give people like Bill Gates $2,000 and claim it is not regressive.

Yeah, sure the bullshit payroll tax cut is not meant to be long term, Well first it was only for a year, and then another year, and then another year, and the next thing you know liars are howling about "tax increases" if it gets taken away, and other fools are arguing that it's not regressive even though it benefits the rich more than it benefits the working class. My money is on the Republicans extending it, because they know which way the dollars are falling. They are falling up, to the haves and have mores.

Unless it were compensated for by increases in revenue elsewhere that were directed in a more progressive fashion.

But right now it is valuable stimulus that helps out a lot of people who need it. The fact that it is not the best option does not mean that it is not a good one, or not worth defending.

All have job losses at varying degrees.

economic failure and horrendous unemployment, so they can pin it on Obama prior to the 2012 election. They DO NOT CARE if the nation goes to hell in a handbasket and widespread economic devastation and suffering occur, as long as they have destroyed Obama's presidency and gotten what they want. And, so far, sadly enough, Obama is playing right into their hands, especially his considering them as far more of a threat than they really are and allowing them to hold the country hostage instead of showing real leadership.

Obama promised when he was Candidate Obama.

Oh, never mind.

The only actual component of the debt limit deal listed is the 30.5 billion. The job cuts related to that are 323,000.

That is a guess. The actual impact of the debt limit deal is unknown - this multiplier/model crap was the method used to produce the administration's famous jobs/stimulus graph, which could hardly have been more wrong.

But in any case, the unemployment benefits and the payroll tax cuts are separate issues, and will be handled separately, and were never part of the debt limit deal.

And, btw, if this cools off commodity speculation, the net impact could be stimulative. It is food prices and fuel prices that are causing our current job losses.

Creepers= Centrists Freepers who actually want to cut benefits and don't care about unemployment figures, etc = Neoliberal, 3rd way, Democrats

Yikes!

it will be clear that we're in a recession NOW.

Technically we aren't in one yet.

By this time this year, after all of the revisions are in, I am confident that you will know that the recession restarted now.

Sorry for the confusion. 2 consecutive quarters of negative GDP. That means declining growth.

You are correct, GDP in Q1 was revised downward, but it still grew at 0.4%

To negative.

He said he couldn't come back any sooner because he's with a foursome that is already signed up to tee off at 7:30 at the club.

things out nicely.

More like:

1. Republicans changing the headlines from their midterm message of "jobs, jobs, jobs" because they have no idea how to deliver on jobs.

2. Republicans attacking and weakening the safety net, a decades-long Republican goal, because they don't want to pay taxes and they want the masses desperate and hungry so they'll work for peanuts.


Washington, now serving both Wall Street and Washington.