President Obama has proposed a respite for states that borrowed from the federal government to pay their citizens’ unemployment benefits. Under the 2009 stimulus act, states that took loans from Washington to pay jobless claims paid no interest for nearly two years. That grace period expired on Dec. 31, leaving 30 states together owing $42 billion. Some businesses face mandatory increases in federal payroll taxes to help repay the loans.
In his 2012 budget, Obama will propose waiving the tax hikes and interest payments for two more years. House Republicans say they’ll oppose any payroll-tax increase, even if it’s deferred until 2014.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.