New Law on Payroll Tax Extension Is Great News
Congress today passed an extension to the payroll tax cut, unemployment benefits, and the “doc fix” for the rest of 2012, avoiding the March 1 expiration and a potential hit to middle-class families across the country. The final vote ensures hard-working Americans and those unemployed through no fault of their own will be able to help contribute to our economic growth as the economy picks up steam.
Payroll tax cuts allow American workers to take home more money in their paychecks: $120 billion more in 2011 alone. Unemployment benefits, through which the government assists people who lost their job through no fault of their own, kept 3.2 million Americans out of poverty in 2010. And without the doc fix doctors would earn 27 percent less in Medicare reimbursements.
By avoiding the drama that has plagued previous congressional negotiations and quickly passing the much-needed legislation, Congress will help millions of Americans save money, stay out poverty, and stay healthy. Here’s a by-the-numbers look at how the payroll tax cut, unemployment benefits, and the doc fix have helped—and will continue to help—Americans.
Payroll tax cut
- 160 million: The number of workers who benefit from the payroll tax cut
- $40: The amount that the average American family can save in each paycheck thanks to the 2 percent Social Security tax cut
- $1,000: The total amount the average American family will save this year
- $120 billion: The estimated total amount added to American workers’ paychecks in 2012 due to the tax cut
- 400,000: The number of jobs saved by extending the cut through the end of 2012
- 0.5: The percentage of gross domestic product saved by extending the cut
- A little more than 700,000: The average number of jobs that unemployment benefits helped to create per quarter over the past few years
- 1.6 million: The average number of Americans who have kept their jobs in every quarter of the recession thanks to unemployment benefits
- $2: The amount added to the economy for every $1 spent on unemployment benefits
- $315 billion: The total amount that unemployment benefits added to GDP from the start of the recession to the second quarter of 2010
- $50 billion: The estimated amount that the economy would have lost if Congress had failed to pass the first extension of unemployment benefits last year, which would have led to the loss of 275,000 jobs
- 49 million: The number of people on Medicare in 2011 who could have been affected if the doc fix had not been extended, driving doctors to refuse to work under Medicare
- Failing to extend the doc fix, unemployment benefits, and the payroll tax cut would have been disastrous for our already-fragile economy. Both Democrats and Republicans should be commended for putting politics aside to enact legislation that will help rebuild our middle class and keep our economy growing.