Payroll tax blip will not bust economy: analysts

Reuters ^ | Dec 20, 2011 | Kim Dixon

[Qbert]

(Reuters) - If Congress misses its New Year's Eve deadline to renew a payroll tax cut and jobless benefits by a few weeks or a month, damage to the economy could be reversed in fairly short order, economists and analysts say.

As the odds of a missed deadline rise, several economists said the economy could survive nearly unscathed if there is a short delay in extending the payroll tax break for 160 million workers and unemployment insurance for millions.

"If it is a week or two, it is annoying but the impact would be fairly small," said Nigel Gault, U.S. economist at economic forecasting firm Global Insight.

Chances of a delay increased on Tuesday when the Republican-led House of Representatives rejected a bipartisan Senate bill that would have extended the tax cut and jobless aid for two months. The House vote deepened the deadlock on the issue.

[frogjerk]

So the Democrats are publicly on record that it is OK to rob Social Security.

[glorgau]

Many blips add up to a bump in the road.

[JakeS]

First let me say, I am not an economist. But I am a businessman. You want recovery? Shut down the government!

Get the Government out of my life and I will hire, promote, give raises, and stop taking Tums.

[ridesthemiles]

It surely is NOT a blip for the millions of employers who have to create proper payroll records with constant changes.

I prepared many a payroll with pen & paper.

Now that everyone thinks that everything MUST be done by computer—wallow in your mess.

[redgolum]

SS taxes go into the general fund. If this cut attacks SS, then every tax cut does.

There is no lock box

[FourPeas]

It surely is NOT a blip for the millions of employers who have to create proper payroll records with constant changes.

Indeed. Each time Congress does this programmers have to scramble. It can make for a very unpleasant Christmas and end of the year.

[FreedBird]

The Dems. pulled the Health Care stunt last year at exactly this time of year. This year we have Reid leaving Washington and Obama running away to Hawaii to spend 3 million on his vacation.