By BRIAN HAWKINS
Republican members of Mississippiâ€™s congressional delegation are applauding the passage and President Barack Obamaâ€™s signing of the Middle Class Tax Relief Act of 2010 â€” a measure that extends the tax cuts of former President George W. Bushâ€™s administration by two years.
Obama signed the legislation Friday. In addition to retaining the Bush-era tax cuts for all taxpayers, the measure also offers an extension of 13 months of benefits to the unemployed and attempts to stimulate the economy with a Social Securty payroll tax cut for all workers.
The package will cost $858 billion over two years, but will help stimulate job growth, leaders say.
â€śI am pleased that families and businesses in Mississippi will not see their federal income taxes rise for the next two years.Â It is my hope that this act will serve to help accelerate the economic recovery by allowing Americans to keep more of the money they earn,â€ť said U.S. Sen. Thad Cochran, R-Miss., in a statement issued Friday.Â â€śNow that we have provided more certainty in this area, it is my hope that the new Congress can more effectively take on the challenge of getting our fiscal house in order.â€ť
U.S. Sen. Roger Wicker, R-Miss., expressed similar sentiments.
â€śRaising taxes on any American family or small business would further strain our weak economic recovery. Extending the existing tax rates helps create stability so businesses can invest and hire. Preventing the largest tax hike from hitting Americans is one of the many steps we need to get our economy back on track,â€ť Wicker said in a written statement.
â€śI am glad Congress stopped the largest tax hike in history from hitting any Americans.Â We should focus on creating an environment that promotes job creation.â€ť
While some have criticized the tax cut billâ€™s likely negative impact on the growing federal budget deficit, U.S. Rep. Gregg Harper, R-Miss., reiterated that overspending by the federal government is the real cause of the deficitâ€™s expansion.
â€śMany pundits focus on how these tax reductions will negatively impact the federal deficit. This argument ignores the significant negative impact that a tax increase would have on the national economy,â€ť said Harper in a statement on Friday.
â€śThe American people are not taxed too little. The government spends too much. This legislation will reenergize the economy and benefit every single taxpayer, including Mississippiâ€™s farming families who are burdened by the estate tax. I do not accept the idea that Congress must increase your taxes to reduce the nationâ€™s budget deficit, just because Washington cannot slow its spending habits.â€ť
With a Republican majority coming into the U.S. House of Representatives, Harper said significant efforts will be made to cut federal spending.
â€śRepublicans plan to put the federal government on a path to a balanced budget when Speaker-designate John Boehner is handed the gavel,â€ť Harper said.
The extended tax cuts in the negotiated package include rates lower than those that would have gone into effect Jan. 1, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends.
The bill also extends through 2011, a series of business tax breaks designed to encourage investment that expired at the end of 2009.
Social Security taxes would be cut by nearly a third, from 6.2 percent to 4.2 percent, for this coming year.
A worker making $50,000 would save $1,000; one making $100,000 would save $2,000.
But the payroll tax cut also means that workers will face an increase in 2012 if the full 6.2 percent rate is restored.
And by scheduling President George W. Bushâ€™s 2001 and 2003 tax rates to expire in two years, the law ensures that taxes will be a top issue in the 2012 presidential election.
Editorâ€™s note: The Associated Press contributed to this report.