A Busy Two Years
Say what you will about Obama’s policies, but there’s no denying that he’s been awfully productive since taking office. Between his reform of the health care and credit card industries and the recent extension of Bush-era tax cuts, the president has racked up an impressive list of accomplishments.
Some of those accomplishments have had real-world consequences for Americans’ wallets, for better and for worse. Here are six ways Obama impacted your finances.
Photo Credit: SEIU International
Higher Credit Card Interest Rates (For Now)
When Obama signed the Credit Card Accountability, Responsibility and Disclosure Act of 2009, the last thing he wanted to do was raise consumers’ interest rates. But the CARD Act, which provides various protections against arbitrary rate increases and shifting due dates, had an unintended side effect: Credit card issuers hiked their rates in anticipation of the new rules taking effect in August of 2010, with rates in the second quarter of 2010 spiking 1.6% over the same period in 2009.
That’s the bad news. The good news is that now that the new rules have taken effect, consumers should have more protection against fees and rate hikes on existing debt.
Photo Credit: xJasonRodgersx
(Relatively) Low Income TaxesIf there’s one thing Republicans and Democrats can agree on, it’s keeping taxes low for middle-class Americans. But earlier this winter that outcome seemed in jeopardy. With Bush-era tax cuts set to expire, Republicans decided to play hardball in their attempt to keep rates low for households making more than $250,000 a year. Cooler heads prevailed and a compromise was reached, with tax cuts staying in place across the board for another two years. That will save the average American around $1,180 a year but also set the stage for the battle to resume the next election year.
Photo Credit: Alan Cleaver
Lower Social Security Taxes
That same tax-cut compromise had another take home benefit for workers: Social Security withholding dropped from 6.2% to 4.2% for 2011. That means if you’re making $1,000 a week at your job, you now have another $20 a week to spend however you please. Imagine that: When Republicans and Democrats play nice, America wins.
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Higher Health Insurance Premiums
The good news is that “Obamacare” should provide 30 million more Americans with health insurance. The bad news is that your premiums will go up as a result. A PriceWaterhouseCoopers study predicted that health care costs will increase by 9% in 2011, with 63% of employers planning to raise premiums this year.
Photo Credit: House GOP Leader
Easier Student LoansOkay, so Obama’s new student loan law didn’t make college any cheaper. But it did raise the maximum award for Pell Grants, which make college a little more affordable for low-income students. And students taking out loans after July 1, 2014 will have an easier time paying them off, with loan forgiveness after 20 years (instead of 25) and payments limited to 10% of discretionary income (instead of 15%).
Photo Credit: Leader Nancy Pelosi
Fewer Job LossesThe real impact of Obama’s stimulus plan – the American Recovery and Reinvestment Act of 2009 – is a topic of ongoing debate. But even as unemployment remains close to 10%, most economists agree things would be even worse had the stimulus not gone through. The White House estimated in July of last year that the stimulus had saved or created 3 million jobs, which helped to blunt the impact of the 8 million jobs that were lost since the recession began. And those whose jobs were victimized by the recession can at least rest easy knowing the government has their back – the tax break compromise passed earlier this winter also extended unemployment benefits.
Photo Credit: Cory Doctorow
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