WASHINGTON (Reuters) - The unemployment rate will rise by about two percentage points if Congress fails to extend a payroll tax cut and unemployment insurance benefits, U.S. Labor Secretary Hilda Solis said on Friday.
Solis told Bloomberg Television that 130 million American families stand to pay more than $1,000 in taxes and five million unemployed would lose benefits if Congress fails to act.
This will “add an incremental two percentage points higher unemployment rate if we do nothing, so yes, the urgency is to do something now,” Solis said.
“Last year in November, we were reporting 9.8 percent unemployment. This time around it’s at 8.6. It’s still above eight percent -- yes it’s high -- and that’s why we need to do more to extend the payroll tax (cuts) and the UI benefits, the unemployment insurance,” she added.
Reporting by David Lawder; Editing by Padraic Cassidy