Obama: Tax Cuts and the Federal Deficit

In his weekly address this morning, President Obama said that the American Recovery and Reinvestment Act will start to impact families "as soon as a few weeks from now" through the quickest and broadest tax cut in history.

He said that 95% of working families will receive a tax cut that amounts to about $65 or more each month. The Treasury Department has been instructing employers to reduce the amount of tax withholding from paychecks, and workers should see their paychecks increase ever so slightly by April 1.

So what will this extra $15 a week or so provide hard working taxpayers with? It won't be enough to continue the lavish lifestyles we were used to before the financial crisis, but it works out to allow a typical family of four to afford one extra fast-food meal a week - that is, as long as we choose the value meals. Or, it's enough to cover roughly two fuel-ups for an average size car every month, as long as gas prices stay about the same. Or, it will cover about a week of school lunches for one child, as long as that child isn't a hungry, growing teenager. Definitely not life-changing, will probably barely make a difference in most people's spending and have little impact on the economy, but at least it's better than nothing. He promised us tax cuts, and that's what we got. Is it just a funny coincidence that this dinky little tax cut goes into effect on April Fool's Day?

Obama also said that he plans to tackle the tackle the trillion-dollar deficit inherited from the Bush administration once the economy is back on track. He plans to meet on Monday to work with independent experts and unions, advocacy groups and members of Congress to figure out how to go about taking on that big job. On Tuesday Obama "will speak to the nation about our urgent national priorities."

The president plans to release a budget on Thursday "that's sober in its assessments, honest in its accounting, and that lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline."

"No single piece of this broad economic recovery can, by itself, meet the demands that have been placed on us. We can't help people find work or pay their bills unless we unlock credit for families and businesses. We can't solve our housing crisis unless we help people find work so that they can make payments on their homes," Obama said. "We can't produce shared prosperity without firm rules of the road, and we can't generate sustained growth without getting our deficits under control. In short, we cannot successfully address any of our problems without addressing them all. And that is exactly what the strategy we are pursuing is designed to do."



Source:
The White House