Speaking from the White House this afternoon, President Obama announced that Congress has agreed to extend the middle-class payroll tax cut and unemployment insurance into next year. The President said:
At a time when so many Americans are working harder and harder just to keep up, the extra $1,000 or so that the average family would get from this tax cut makes a real difference when you’re trying to buy groceries or pay the bills, make a mortgage or make a repair. And all kinds of independent economists agree—the number one challenge facing businesses right now is a lack of demand from consumers, which is why more people spending money means companies that are more successful and more able to hire more workers.
Today, Congress has finally agreed to extend this middle-class tax cut into next year. And they’ve also agreed to another part of my jobs plan, extending unemployment insurance for millions of Americans who are out there trying as hard as they can to find a job. This is spending money that also benefits families and businesses and the entire economy. And it’s a lifeline that would have been lost for more than 2 1/2 million people in the first two months of next year if Congress had not acted.
So I'm very pleased to see the work that the Senate has done. While this agreement is for two months, it is my expectation—in fact it would be inexcusable for Congress not to further extend this middle-class tax cut for the rest of the year. It should be a formality. And hopefully it’s done with as little drama as possible when they get back in January.