Thursday, December 9, 2010

With Politics, There's Always Nasty Compromise

According to today's Wall Street Journal, there might be a light at the end of the tunnel for the middle class even in the midst of the unhappy compromising on the Bush tax cuts:

Th deal includes a 13-month extension of lapsed federal jobless benefits and a temporary cut in the worker's shaer of the Social Security payroll tax. It would extend a raft of other tax cuts aimed at middle-class tax payers, including a two-year program to shield most Americans from the Alternative Minimum Tax (AMT).


The price to be paid is huge: $700 billion in unfunded mandates for extending the Bush tax cuts set to expire at the end of the year. The prospect of passage has already pushed up U.S.borrowing costs which will greatly increase the budget deficit. A standard in credit determination, the yield on the 10-year treasury bond, has gone to 3.22%, the highest level since June 2010.

The Democrats are rightfully angry.

[They] want an extension of the Build America infrastructure bond program, but many lawmakers concede it might die due to Republican opposition. The bond program, set to expire at the same time as the Bush tax cuts, provides subsidies for taxable bonds issued by state and local government.

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