The President used his bully pulpit to pressure the House GOP to accept the Senate bill which didn't have the spending reductions and punted the debate over how to 'pay for' the temporary tax reduction until after the holidays. The President, and Democrats, tossed out numbers like 160 million workers were facing a tax increase on January 1 if the temporary 2% reduction wasn't extended - even though the US Census Bureau says the US economy only has 131.7 million workers.
They also repeated the claim that as a result of this temporary tax reduction, every worker would see an additional $40 in their biweekly paychecks - $160 for the 2 month extension and about $1,000 for a full year extension. Left unsaid was that this temporary tax reduction would reduce the revenues coming into the Federal Government by $121 - $130 billion in 2012. That represents a little less than 10% of the projected deficit.
How does this $1,000 average additional take home pay really compare to the effects of some of the other policies enacted by the Obama Administration?
An estimated 84 Million Americans will be fueling up to drive over the next few weeks. Despite a recent decline in gas prices, this years average cost of fuel sets a new record. For 2011, the national average price for fuel is about $3.50 a gallon. That accounts for about 8.4% of the average American family’s income, the highest percentage in 30 years.This is also the same Administration that is opposing authorizing the expansion of the Keystone pipeline to increase the supply of oil that can be bought and brought to US refineries along the Gulf Coast. It's also the same Administration whose EPA just announced major new regulations intended to reduce the already minuscule mercury levels released by coal powered power plants -regulations that will cost billions of dollars to the industry, result in plants closing, electricity rates skyrocketing, lost jobs, and other higher costs related to the higher energy costs. (Ironic though, that the Administration is also pushing for consumers to bring mercury into their homes at higher amounts by the adoption of CFL light bulbs...)
The average American household will have spent, a record, $4,155 filling up this year. Though it’s not what some Eastern Iowans wanted to hear, for many it wasn’t a surprise. “It’s better now, it was pretty bad earlier in the year, but it’s better now. Which I appreciate because you spend a lot more on gas in the winter time,” said Charles Conner, of Cedar Rapids.
Fuel hasn’t been cheap here in Iowa, or across the country this year. On average, fuel was about 76 cents per gallon more than in 2010. It was 29 cents per gallon more than in 2008. “Having a truck it sucks when you are paying 60 to 70 bucks a tank,” said Matthew Woods, of Cedar Rapids. Lacey Higdon, of Rowley drives about 45 minutes to and from work each day. “It’s a long commute. I work two jobs here in Cedar Rapids so I am here seven days a week, so it’s good to see them going down,” said Higdon.
Here in California, we're actually happy at the moment with gasoline prices in the $3.65 a gallon range for unleaded regular...it's down from about $4.00 a gallon several months ago. Memories of $2.50 a gallon prices are getting pretty distant...
I wonder if it's possible to create a tally that has on one side the $1,000 per year the Administration wants to give the consumer via a temporary reduction in the Social Security Payroll Tax plus any other programs advocated by the Administration that increases funds for the consume, and on the other side the additional costs the consumer has to bear as a direct result of the policies and regulations advocated by the Administration. I suspect it would be a surprisingly high net outflow for the consumer.