Our national debt just passed $15 trillion – that is, $15,000,000,000,000. The Congressional Super Committee tasked with figuring out how to bring that number down was due to come to an agreement by Thanksgiving, but leading up to that deadline, it did not appear that the Super Committee had any answer. The Super Committee had been meeting since August in the wake of the near failure for Republicans and Democrats to reach a deal to pass the budget.
For the unemployed and those receiving Social Security benefits, the Super Committee faced two options: extending payroll tax cuts and unemployment benefits or letting these things expire. Many economists have been arguing for the extension of the tax cuts and unemployment benefits, but with those, the federal government would have to come up with another $160 billion, not an easy task given the budget crises nearly every government agency already faces.
The alternative is letting payroll tax cuts and unemployment benefits expire. The payroll tax cut funds Social Security benefits, so without that money coming in, the government has to fund Social Security benefits from other incoming money. The cuts give Americans an extra $1,000 to $2,000 a year, which goes a long way these days. The unemployment benefits have been providing people with about $300 a week.
The fear is that without these tax breaks and unemployment benefits, the lingering economy could grow even worse. Economists have found that most of the extra money goes back into the economy, as those facing tough times use the extra money in their communities, bolstering local business.
The payroll tax cut would reduce Social Security taxes on your wages from 6.2 percent to 3.1 percent. How big of an impact would that extra money have on your financial situation?
Troutman & Troutman, P.C. – Tulsa Social Security disability attorneys