Where’s the economy headed now as Democrats oppose Obama’s tax deal?

The markets and the general public continue to hang on to their breath as the president’s bill to prevent taxes from rising may face a grinding halt courtesy of no other less than his own party.

The Democratic caucus voted to sharply oppose President Barack Obama’s compromise tax deal with members of the GOP in Congress, which guarantees a two-year extension of the Bush-era tax cuts for all income brackets.

Obama’s partymates was angered with how the president easily conceded to the Republicans in Congress including extending tax cuts to the so-called wealthy and a lower-than-expected estate tax rate after a $5 million threshold per individual.

Vice President Joe Biden, who negotiated the deal with the GOP, defended the plan and told fellow Democrats that they must either approve of it or not.

Those in favor of it believe this will keep the momentum in the economic recovery considering US unemployment remains a shade under 10 percent. The economic package also guarantees a 13-month extension of unemployment benefits, a 2 percent slash in payroll taxes, and tax breaks for small businesses.

The business sector is generally supportive of the package to be passed as they seek more certainty in the economic outlook for the near term. Some businessmen have suggested that the proposed tax cut extension would allow their companies to purchase equipment and hire more people, both vital to the economic recovery in general.

Aware of the opposition from within its own stable, the White House, in a statement, believed that discussions between both sides will still continue in the next few days and some of the major elements of the economic package will eventually be approved.

Unemployment in older people on the rise

With their savings and investments wiped out by the financial meltdown, the economic crisis has surely claimed people aged 55 and above as its helpless victims. Many belonging in this particular segment of the population are now forced back into the jobs market seeking for work but sadly they are not getting the call back.

In the recently released November jobless report, more than one in every ten Americans are out of work for 12 months or more. Another report by Pew Fiscal Analysis Initiative last April revealed older people had the most difficult time landing a job.

Older workers, who have been working for 20 years or so, find out that their work experience is actually working against them as employers are increasingly looking to hire younger and “cheaper” workers.

Unemployment in the United States spans a broad range of industries including manufacturing and retail. The November jobs numbers showed a weaker-than-expected 9.8 percent unemployment rate, casting a cloud on the Obama administration’s economic strategy.  

A New York Times study shows unemployment rate for aged 55 and above is now twice as it was before the crisis began in late 2008. The same study also reveals poverty is now steadily on the rise in this age group.

Analysts agree that older workers do not only have to hurdle competition against younger workers, but may also find it challenging to get around new technology, which changes rapidly. Many older workers are also questioned by employers on why they were out of work for a long time, diminishing their value on the market.