The continuing battle between Republicans and Democrats in Congress goes on without a resolution on how to pay for the extension of payroll tax cuts for workers. As of this writing Congress needs to move quickly or the payroll tax (also known as FICA) would increase by 2 percentage points. If the extension expires, the payroll tax rate would return to 6.2%, translating to about $1,000 less for a wage earner making $50,000 per year.
Along with the tax cut going away there could also be a decrease in the maximum number allowable unemployment weeks paid to jobless individuals cutting down to 54, from 99 weeks.. If the extension is not renewed, there is also a proposed 27 percent cut in Medicare reimbursement to doctors.
Currently the good news is that the jobless rate has dropped from mid 9’s to now 8.3 percent in a slowly recovering economy.