President Obama Thursday misled workers with his “$40” PR campaign, suggesting workers would lose double the amount they actually would if House Republicans failed to accept the Senate measure extending the payroll tax holiday for two more months.
Twice during remarks at the White House, Obama indcated voters would pay $40 extra in taxes per weekly paycheck. But by the White House’s own calculations, an average family making $50,000 annually would lose about $1,000 per year from their earnings, or a little more than $40 out of every biweekly paycheck.
Here’s what Obama said:
Anyone who knows what it’s like to stretch a budget knows that at the end of the week, or the end of the month, $40 can make all the difference in the world . . . So on Tuesday, we asked folks to tell us what would it be like to lose $40 out of your paycheck every week.
At no point in his remarks did he suggest he was talking about a biweekly paycheck. And nowhere on the White House website page trumpeting the $40 campaign does it say the campaign refers to a biweekly paycheck.
The $40 campaign was the final salvo in a White House PR war that eventually forced House Republicans to capitulate on their demand that the Senate negotiate a full -year extension before the payroll tax cut expired on Jan. 1.
While most companies do payroll biweekly, many workers still receive weekly paychecks, and they would only have lost about $20 per check, not $40. They could easily have perceived, from what they heard out of the White House Thursday, that they would be losing $40 in each of their weekly paychecks.
And those receiving biweekly checks could well have understood the White House to be talking about weekly checks and figured they would actually be losing $80 per paycheck
Adding to the White House obfuscation is that maintaining the tax cut for two months will be paid for under the legislation by a new fee – lasting ten years, not two months – that will bump up payments for new mortgages and refinances.
According to one report, the new fee would result in a $15 per month added payment on an average $200,000 mortgage, or about $180 a year. That would erase the savings from a two-month extension of the payroll tax cut in just a year for families taking out new mortgages of this size or greater – and obliterate it over ten years.