Partisan impasse threatens consumer and business well-being
Dec 22, 2011 Philip Burgess
Political gridlock in Washington may take a toll on consumer activity in coming months - that is, if lawmakers are unable to reach a compromise to extend a popular payroll tax break. If Congress fails to reach a bipartisan agreement, some 160 million Americans will see their taxes climb on January 1. Furthermore, until a deal is reached, the fledgling Consumer Financial Protection Bureau has no power to regulate credit decisions financial products offered by non-banks. This may free up the availability of credit for sup-prime borrowers and consumers with poor credit, asserts Christopher Maag for Credit.com. However, analysts are worried more about the impact the most recent fiasco will have on business sentiment. Aziz Hashim, who owns several Popeye's and Domino's franchises throughout the country, told the Washington Post that franchise businesses are already feeling the pinch of high commodity prices and weak consumer spending. "This tax cut would have been immensely important for us," Hashim added. "We're feeling margin compression at every angle, and the customer can’t bear higher taxes right now because they also have so little relief." The International Franchise Association has warned that a failure to extend the payroll tax break could compromise the creation of 168,000 new jobs in 2012.