A massive bipartisan tax package preventing a big New Year’s Day tax hike for millions of Americans is on its way to President Barack Obama for his signature Friday.
This extends tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.
The president is expected to sign the bill Friday afternoon.
“There probably is nobody on this floor who likes this bill,” said House Majority Leader Steny Hoyer, D-Md. “The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they’re right.”
The bill’s cost, $858 billion, would be added to the deficit, a sore spot among budget hawks in both parties.
Lawrence Yun, NAR Chief Economist , highlights on his projections:
His projections if tax cuts are passed, which they were:
- GDP growth in 2011 will be closer to 3 percent (rather than the 1.9 percent assumed).
- Job creation could easily top 2.5 million payrolls rather than our originally projected 1.5 million next year.
- downside: because of the larger projected deficit, mortgage rates will surely climb. Indeed, they seem to have already started up the slope.
- Nonetheless, home sales could still be boosted by 60,000 units on the strength of job gains. That would bring total existing-home sales to 5.2 million next year.
- there is no free lunch and there will be a cost in terms of a higher budget deficit and lower economic growth in later years.