Have you heard the great news? The U.S. Senate approved a bill that will extend the 2% payroll tax cut for another two months along with extending unemployment compensation and certain health provisions.
A full two months!
The next step is for the House of Representatives to consider the bill, although passage isn’t looking too good since it appears that the House Republican leaders oppose the Senate bill because it only extends the payroll tax cut for two months instead of one year.
The amendment is expected to cost just under $33 billion according to the Congressional Budget Office (CBO). The CBO’s analysis shows that the cost of this amendment will be paid back and even reduce the deficit by almost $3 billion… after ten years.
You have to love Congressional math.
How will the cost of this amendment be offset? By increased fees on new mortgages backed by Freddie Mac, Fannie Mae and the FHA. Various news outlets state that borrowers would pay $15 – $17 / month on a new or refinanced $200 thousand mortgage.
Sorry new homeowners, while the government will let you keep some additional money in your left pocket for a few months, they will take even more out of your right pocket for years to come. I am confident that the government will use the additional money you will pay in fees wisely, aren’t you?
On a completely related note, language was inserted into the bill that will require President Obama to make a decision on the Keystone XL Pipeline within 60 days.
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