Business

DC ‘deal’ not a gas for most

Last August, unrest in Libya sent oil prices soaring — pushing gas here in the US up 39 cents a gallon in just five weeks.

The White House quickly leaked word that President Obama was thinking about tapping the country’s Strategic Petroleum Reserve to stabilize prices and protect the economy.

Many members of Congress, concerned over the fragile state of the US jobs market and consumer spending, applauded the idea. It was as if a national disaster averted.

Fast forward to last week, when, thanks to the expiration of a payroll tax cut, every working American saw his or her paycheck shrink. For most workers, the tax bite was equal to gas prices jumping $1 a gallon.

Overnight.

But all you hear from Washington is crickets. Or even worse.

Lawmakers and the White House are congratulating each other on averting a fiscal cliff.

But for cops, firefighters, teachers and other folks earning $50,000 to $75,000 a year, the $866 added tax bite is like a jolt at the pump.

And that’s going to hurt.

Despite the claim that the administration was out to protect the little guy and the middle class, nothing could be further from the truth.

Goldman Sachs economist Jan Hatzius sees the payroll-tax cut shaving 0.6 of a percentage point from gross domestic product. Moody’s Chief Economist Mark Zandi said in an e-mailed statement that he thinks all the tax increases taking effect, including the payroll-tax hike, will cut 0.75 of a percentage point from GDP growth and lead to 600,000 fewer jobs being created this year.

So why the celebration and back-slapping in Washington?

The deal is a disaster for working-class families — and nobody in Washington seems to have their backs.

And remember, without addressing the issue of spending cuts, the deal last week, according to the Congressional Budget Office, will add $3.97 trillion to our already mounting debt.

Some deal.