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February 14, 2012 7:15 PM

On the payroll tax cut, Republicans are playing tiddlywinks. Democrats are playing poker. They reached a tentative House-Senate agreement on Tuesday and may unveil an agreement today to send to President Barack Obama for approval.

Obama and Congressional Democrats want to extend the
2 percentage-point cut in the Social Security tax that was enacted in December 2010. The tax cut expired in December 2011 but was extended until Feb. 29. The cut dropped to 4.2 percent from 6.2 percent the amount of income each employee is taxed.

The options are for another short-term extension, to Dec. 31 (and through the November election) or to make the cut permanent. Congressional negotiators also are approaching a Feb. 17 deadline, when Congress is scheduled to go into recess. Democrats have pushed the tax cut because it goes to working people, whom they want to attract as voters.

Republicans have balked because the tax cut adds close to $90 billion a year to the federal deficit. The deficit is expected to be $1.1 trillion through fiscal year 2012, which ends on Sept. 30. That amount was a bit less than the $1.3 trillion deficit for fiscal year 2011. But it’s an incredible amount of money that adds to the current federal debt of $15.3 trillion.

Are Democrats bluffing? Would they let the payroll tax cut expire at the end of this month, thus sticking it to workers and throwing blame on Republicans?

AP reported that some Republicans want “to partially pay for the 2-percentage point payroll tax holiday through freezing federal workers’ pay and requiring more affluent seniors to pay higher Medicare premiums.” Well, we’re all for freezing federal workers’ pay, which according to some studies is double that of equivalent jobs in the private sector. And Medicare needs to be reformed. But those issues can be dealt with later.

Republicans should start playing some real poker and insist on making the payroll tax cut permanent.

“It would continue the economic growth we’re enjoying, and that’s good news,” Esmael Adibi told us; he’s Director of the A. Gary Anderson Center for Economic Research at Chapman University. “A big portion of that will be spent by consumers. If Republicans say ‘no,’ then come the election, Democrats could say the Republicans didn’t help working people.”

He agreed that adding to the deficit and debt is a problem. “But there are trade-offs,” he said. If the payroll tax cut is eliminated, it would suck $90 billion out of the private economy. “But over the long run, it’s a problem because of the deficit and debt. As long as we come up with a solution to those problems, then it’s a good idea.”

We believe that making the payroll tax cut permanent — or at least extending it to Dec. 31 — would signal that Congress is serious about continuing the current economic growth, which after all is modest, thus forestalling a recession. An economic crash would create more joblessness, which in turn would cut payroll tax payments because the unemployed don’t pay the tax.

As to the deficit and debt, they ought to be dealt with through cutting current spending. Long-run solutions to these problems will have to wait until the presidential and congressional races are decided in November. Until then, Republicans should put on their poker faces and increase the bid to a permanent payroll tax cut. — Freedom Communications, Inc.

See more here:
OUR VIEW: Congress should extend the tax cut

(MENAFN - Khaleej Times) The Election Commission of Pakistan on Tuesday decided to grant voting rights to overseas Pakistanis. The decision will allow 3.7 million Pakistanis living abroad to vote.

ISLAMABAD - The Election Commission of Pakistan on Tuesday decided to grant voting rights to overseas Pakistanis. The decision will allow 3.7 million Pakistanis living abroad to vote.

The debate on whether overseas Pakistanis should be allowed to participate in Pakistan's elections gained steam after Pakistan Tehrike Insaf chairman Imran Khan moved the Supreme Court requesting that Pakistanis living abroad should be permitted to vote.

At a meeting of the commission on Tuesday, which was chaired by ECP secretary Ishtiak Ahmed Khan, participants from various political parties decided that names of overseas Pakistanis will be registered in the electoral rolls.

A voting mechanism has yet to be decided, but the participants discussed various proposals, including the option of postal balloting and setting up polling booths at Pakistani embassies.

Sources said non-resident Pakistanis above 18 years of age would be tracked by the National Database and Registration Authority and they would be sent ballot papers by post. The next general elections are scheduled for 2013.

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UAE- Pakistani expats get voting rights

THE cost of living for expats is still higher in Shanghai than it is in New York, according to the latest survey.

Shanghai rose six places to rank 42nd in a global list while New York climbed two places from 49th spot in June to 47th, according to a cost of living survey by the UK-based Economist Intelligence Unit using data from December last year.

Los Angeles and Moscow tied with Shanghai while Beijing dropped three places to 59th. Hong Kong is 22nd.

The biannual survey, which aims to explore the true cost of an expat lifestyle in 130 major cities, compares more than 400 prices across 160 products and services.

The survey covers the cost of necessities such as food, drink and clothing, and optional spending such as on private schools, domestic help and recreation.

The survey found, for example, that a kilogram of white sliced bread was US$3.58 on average in Shanghai compared with US$3.36 in 2010, and the price of a liter of regular unleaded petrol was US$1.22 compared to US$0.98. Ten years ago, bread was US$2.05 and the petrol US$0.34.

Despite price increases over the past decade, Shanghai has seen its relative cost of living fall, slipping from 16th spot 10 years ago as the US dollar, which China's currency yuan used to be pegged to, started to weaken from its 2001 high. Beijing once ranked 11th and Hong Kong third.

Following the strengthening of the Swiss franc last year, Zurich is now the most expensive city for expats, pushing Tokyo into second place. Another Swiss city, Geneva, has moved up six places to end joint third with Japan's Osaka.

Though in the midst of a sovereign debt crisis, Europe accounts for half of the top 10 most expensive cities, with Oslo fifth, Paris sixth, and Frankfurt 10th.

"Local inflation in mature markets always has far less influence on the relative cost of living than the currency movements of the countries in question," the report said.

The appreciation of the Australian dollar, whose parity with the US dollar dropped to only half the value 10 years ago, also explains the recent presence of Sydney and Melbourne among the 10 most expensive locations. They came seventh and eighth.

The three least expensive cities for expats were Karachi, Mumbai and Tehran.

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Eastday-Shanghai still more expensive than New York

Federal Treasurer Wayne Swan says the latest financial results from Commonwealth Bank of Australia's (CBA) shows how "hugely profitable" it is, despite the volatile global markets.

The CBA, along with the other big banks - ANZ, National Australia Bank and Westpac - have raised their standard variable mortgage rates in recent days, blaming rising overseas funding costs flowing from the European debt crisis.

The increases came despite the Reserve Bank having left its official cash rate unchanged at last week's monthly board meeting, sparking a verbal stoush between the government and the financial institutions.

St George Bank was the latest bank to lift its standard variable home loan rate, increasing it by 12 basis points - more than the big four, which recorded rises of six to 10 basis points.

CBA, the nation's largest home lender, reported a net profit of $3.6 billion for the six months to December 31 on Wednesday, up 19 per cent from the previous corresponding period.

"They have made that profit despite global volatility in financial markets. It shows they are hugely profitable," Mr Swan told parliament on Wednesday.

He said the banking system should work for "all Australians", not just shareholders, which was why the government had pursued reforms to increase competition.

Still, unlike the ANZ - which led the way in the round of rate moves, and followed up by cutting 1000 jobs - the CBA has no plans for drastic staff reductions, either by redundancy or sending positions offshore.

But CBA chief financial officer David Craig told reporters unemployment was likely to rise in the finance sector and that it was hard to say whether other sectors of the economy would offset that.

His comments came ahead of Thursday's release of official labour force data for January.

Economists' forecasts centre on a 15,000 rise in the number of people employed, although this is not enough to prevent unemployment rate ticking up to 5.3 per cent from 5.2 per cent.

In making its staff decision, ANZ joins a long line of other sectors to announce job reductions, particularly in manufacturing.

But Shop Distributive and Allied Employees' Association boss Joe de Bruyn says he does not believe the cuts will push up jobless figures significantly.

"The truth is there are some job losses getting a lot of publicity but there are companies that are expanding," the union boss told AAP.

Mr de Bruyn said the union's national executive had seen a list of new supermarkets, discount and hardware stores in the pipeline, generating work for hundreds in coming years.

Employment concerns do not appear to be worrying consumers just yet, with the latest reading of the Westpac-Melbourne Institute confidence index rising by 4.2 per cent to 101.1 points in January, and in belated response to the rate cuts in November and December.

Above an index of 100 shows there are more optimists than pessimists.

But Westpac chief economist Bill Evans said the survey period for the index would not have totally taken into account the disappointment that the Reserve Bank left the cash rate unchanged, when a cut was widely expected, or the subsequent increases in bank lending rates.

Mr Evans still expects the Reserve to cut the cash rate by a further 50 basis points this year, with the first 25 basis points likely in March.

Originally posted here:
Banking system should work for all: Swan