Don Miller, owner of Creative Impressions in Virginia, is worried about paying higher unemployment taxes when his business is down. 
 
 UNEMPLOYMENT TAXES UNEMPLOYMENT TAXES Thirty-six states have increased the annual tax businesses pay to finance unemployment benefits. 
 
 State Average tax 
 
 per worker Change Ala. $267 124% Alaska $447 19% Ariz. No change Ark. $300 16% Calif. No change Colo. $236 45% Conn. No change Del. No change D.C. No change Fla. $312 200% Ga. $213 48% Hawaii $1,070 1089% Idaho $816 134% Ill. $323 7% Ind. $385 79% Iowa $468 23% Kan. $350 116% Ky. No change La. $111 14% Maine $328 74% Md. $422 159% Mass. Varies Widely Varies Widely Mich. $21 surcharge per employee Minn. $450 14% Miss. No change Mo. No change Mont. $482 72% Neb. $300 165% Nev. No change N.H. $332 71% N.J. $896 57% N.M. No change N.Y. $349 9% N.C. No change N.D. $333 36% Ohio $270 2% Okla. No change Ore. $646 49% Pa. $432 13% R.I. $675 7% S.C. No change S.D. $227 191% Tenn. $293 49% Texas $165 85% Utah No change Vt. $329 38% Va. $171 78% Wash. No change W.Va. $348 61% Wis. $384 23% Wyo. $581 69% Sources: U.S. Labor Department and state workforce agencies MORE FROM PROPUBLICA MORE FROM PROPUBLICA See an interactive chart on the health of your state's unemployment insurance trust fund and how it affects you at propublica.org/unemployment. Payroll taxes increase for many employers across USA NORFOLK, Va.  Last year was the worst Don Miller had seen in more than 20 years of running a graphic printing business here. Business slumped 15%, and he had to lay off two of the three workers who helped him print stickers and signs for Navy ships. Miller hopes to bring them back, but hiring will be more expensive for all Virginia business owners this year. The recession has emptied Virginia's unemployment insurance trust fund, and the state is making up for it by raising taxes on employers and cutting jobless benefits for seniors. In 2009, the average business owner paid $95 per employee. This year, the tax will be $171, according to estimates by the state workforce agency. "It's another added expense to hiring somebody," Miller says. "Everything's going up, and business is going down." Similar tax increases are hitting employers nationwide this year as states struggle to pay the 5.5 million Americans currently collecting state jobless benefits. So far, high unemployment and, in many cases, poor planning have prompted 25 states to borrow more than $25 billion from the federal government to keep benefit checks in the mail. In other states, unemployment compensation funds are still in the black, but reserves are rapidly dwindling. Nine more states likely will be borrowing by mid-year, according to a ProPublica analysis of state revenue and benefits. Tax on businesses Business owners in 36 states face tax increases ranging from a few dollars to nearly $1,000 per worker. Six states are scaling back or freezing benefits for the unemployed: • Jobless Pennsylvania workers will get 2.3% less in benefits starting this month, while the average tax this year for businesses will increase to $432 from $384 per worker. • Hawaii's employers face an average increase to $1,070 from $90 per worker. The state also proposes decreasing the maximum benefit by as much as a third — about $190 per week. • Texas, where the trust fund is $1.4 billion in the red, has increased the average tax on employers to about $165 from $89 per worker. Instead of fulfilling the unemployment insurance system's purpose of stimulating the economy, these measures may contribute to joblessness, says Gary Burtless, an economist who studies labor policy at the Brookings Institution, a think tank. "We don't want to pick this moment of all moments to boost taxes on employers," Burtless says. "We want to encourage employers as much as possible to add to their payrolls." Workers are being hurt in another way — through benefit cuts. In Roanoke, Va., James Hay, 70, received a letter from the state informing him that his monthly unemploymentbenefits are being cut to $100 from about $800 because state law limits payments to Social Security recipients when the state's fund runs low. "I was devastated when I read it," Hay says. "I thought, 'Lord, what am I going to buy heating oil with this winter?' " Like many other seniors, Hay was working full time to supplement his $1,400 monthly Social Security check, which he says was not enough to support him, his granddaughter and her two young children. Then the asphalt factory laid him off. Unemployment insurance made up for some of the lost income, but now Hay is not sure how his family will get by. "We'll just have to do whatever we can do," he says. "I hope and pray we'll be all right." States borrow heavily The state hopes to save about $11 million through the cuts to seniors but anticipates borrowing $1.3 billion to replenish its unemployment fund before the recession ends. "The middle of a recession is when people need help most," says Maurice Emsellem, policy co-director of the National Employment Law Project, an advocacy group for low-wage workers. Cutting unemployment benefits, he says, "undermines the fundamental goals of the program — boosting the economy and keeping people out of poverty in an economic downturn." Many states such as Virginia are already at or near the highest payroll tax rates allowed by law, and others have pushed politically difficult tax increases through their legislatures, making further benefit cuts likely if high unemployment persists, says Rich Hobbie, executive director of the National Association of State Workforce Agencies. Some of the pain might have been avoidable. Long before the recession began, Virginia and many other states that have imposed tax increases or benefit cuts let their trust funds dwindle well below the 18 months of reserves the U.S. Labor Department recommends. Virginia had to slow down federal borrowing despite the impact on businesses and seniors, says Republican state Sen. John Watkins, chairman of the Virginia Commission for the Unemployment Insurance Trust Fund. "I have angst for people who are unemployed," he says. "But our trust fund is busted — it's gone." Pierce reports for ProPublica, an independent, non-profit newsroom based in New York. USA TODAY editors worked with her in preparing this story for publication. Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more ||||| The ideas President Barack Obama is considering for his new jobs agenda could put hundreds of thousands of people back to work, and still have a limited impact in an economy that remains 6.8 million jobs behind its pre-recession peak, economists said. 
 
 Among the options Obama is considering is a version of a tax credit for new hires that could spur the creation of 900,000 additional jobs at a cost of $30 billion, according to an estimate by Michael Greenstone, an economics professor at the Massachusetts Institute of Technology and former chief economist for Obama’s Council of Economic Advisers. 
 
 “It allows the private sector to lead the economy toward the areas where the payoffs are greatest,” Greenstone said. 
 
 In discussions with the president, Obama’s economic team has strongly backed a tax incentive for new hires, said a person familiar with the deliberations. 
 
 Even so, the president’s capacity to dramatically improve the economy is limited after an $830 billion fiscal stimulus and almost three years of accommodative monetary policy from the Federal Reserve. Obama also confronts political constraints from Republicans in Congress opposed to further federal spending. 
 
 “The broad honest answer is that there’s a limited amount that he can do that I know of,” said Martin Neil Baily, a former chairman of the Council of Economic Advisers under President Bill Clinton. “We’ve kind of done a lot of the things we know how to do.” 
 
 Worker Retraining 
 
 The White House is considering more infrastructure spending, tax incentives to spur hiring, a reduction in the employer portion of the payroll tax credit and changes to unemployment insurance to subsidize worker retraining for inclusion in a jobs plan Obama is to announce next week, said a person familiar with the discussions. 
 
 Obama said at a White House ceremony yesterday he will use the moment to lay out proposals “to put more money in the pockets of working families and middle-class families, to make it easier for small businesses to hire people, to put construction crews to work rebuilding our nation’s roads and railways and airports and all the other measures that can help to grow this economy.” 
 
 Obama has spent much of the year pressing Congress to act on a familiar set of plans: renewal of a two-percentage-point cut in the employee-paid portion of the payroll tax and extended unemployment benefits, which are both scheduled to expire on Dec. 31; establishment of an infrastructure bank to fund public works spending; ratification of free-trade deals; and overhauling patent law. Obama has said those also will remain priorities. 
 
 Jobless Rate 
 
 More than two years after the recession’s official end, the jobless rate held at 9.1 percent in July, just one percentage point below its 10.1 percent peak in October 2009. Concern about the economy has increased in recent months as growth weakened during the first half of the year to its slowest pace of the recovery and financial markets turned tumultuous amid worries about the European debt crisis. 
 
 Federal Reserve Chairman Ben S. Bernanke said last week at the central bank’s annual Jackson Hole, Wyoming, symposium that U.S. growth “has, for the most part, been at rates insufficient to achieve sustained reductions in unemployment.” 
 
 Joel Prakken, senior managing director of Macroeconomic Advisers LLC in St. Louis, said he doesn’t “have high hopes -- really any hopes” of a significant boost to economic growth from Obama’s new jobs agenda. 
 
 Weak Private Sector 
 
 “We just don’t think that can make up for the fact that in the private sector demand is so weak right now,” said Prakken, who published an Aug. 24 analysis of Obama’s options based on media reports of items under consideration. 
 
 Still, Greenstone said, “The right test is not whether they will solve the overall unemployment crisis but whether they will improve the lives of hundreds of thousands of families, and these programs can do that.” 
 
 A $5,000 tax credit for new hires combined with a five- percentage-point reduction in payroll taxes on the net increase wages paid by a business would stimulate 900,000 additional new jobs, according to his analysis. The tax break would also wind up subsidizing about 5.1 million new hires that Greenstone forecasts will occur without the incentives. Consequently, the cost per additional job would be about $35,000 apiece, he said. 
 
 The White House hasn’t disclosed how a tax incentive for new hires would be structured, and its impact and cost would depend on details such as the amount of a credit. 
 
 Infrastructure Spending 
 
 While government-funded infrastructure spending would directly add jobs and boost overall economic growth, public works programs take time to ramp up and so would their impact on hiring, Prakken said. Even though Obama’s 2009 economic stimulus concentrated on “shovel-ready” projects, it was criticized for delays in getting people back to work. 
 
 Prakken estimates a $50 billion public construction program could only complete about $7.5 billion in work the first year. He estimates that would create 75,000 jobs in the first year and peak employment of about 125,000 in the second and third years. That is about the same as the average monthly growth in payrolls so far this year. 
 
 Jared Bernstein, Vice President Joe Biden’s former chief economic adviser and now a fellow at the Center for Budget and Policy Priorities, said a public works program targeted at refurbishing dilapidated schools could have greater immediate impact. 
 
 Bernstein said low-income school districts have a deep backlog of repairs needed. Work such as roof repairs, insulation, weatherization and window replacement require more workers than most infrastructure spending, he added. 
 
 He estimates $50 billion spent on school renovations could create 500,000 jobs within 12 to 24 months. 
 
 John Makin, an economist at the American Enterprise Institute, a Washington policy research group that supports low taxes and market-driven policies, said he doubted any of the measures would lead to a sustained improvement in employment. 
 
 “These short-term stimulus measures haven’t been working,” Makin said. “When you take them away, growth goes back down again.” 
 
 To contact the reporter on this story: Mike Dorning in Washington D.C. at mdorning@bloomberg.net. 
 
 To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net. ||||| The congressional committee tasked with reducing the federal deficit is poised to admit defeat as soon as Monday, and its unfinished business will set up a year-end battle over emergency jobless benefits and an expiring payroll tax holiday. 
 
 Those provisions are among a host of measures set to lapse at the end of December. During nearly three months of negotiations, the “supercommittee” had been weighing whether to extend at least some of them as part of a broader plan to shave a minimum of $1.2 trillion over the next decade. 
 
 Democrats and many economists consider particularly urgent the need to extend jobless benefits and the one-year payroll tax cut. With national unemployment stuck at 9 percent, and the ranks of the long-term unemployed at record levels, the government is providing up to 99 weeks of support to about 3.5 million people. 
 
 Meanwhile, the payroll tax cut, enacted last December, allows most American workers to keep an additional 2 percent of their earnings, a boon to tight household budgets as well as the economic recovery. Economists at J.P. Morgan Chase recently estimated that if Congress does not extend the two measures, economic growth next year could take a hit of as much as two percentage points — enough to revive fears of a recession. 
 
 Time is also running out for doctors who see Medicare patients. These physicians are scheduled to absorb a 30 percent cut in government reimbursements in January. A long list of tax breaks, including an inflation adjustment that protects more than 30 million families from paying the alternative minimum tax, also will be eliminated unless Congress acts. 
 
 Although many of the expiring provisions have received bipartisan support in the past, this year they face a welter of political obstacles, none more important than cost. Extending them all through 2012 threatens to add nearly $300 billion to annual budget deficits — and therefore to future borrowing — darkening the nation’s fiscal outlook at the very moment lawmakers had hoped to reassure financial markets with fresh savings. 
 
 Sen. Jeff Sessions (Ala.), the ranking Republican on the Senate Budget Committee, said he was uneasy about extending the payroll tax holiday, calling the national debt “a greater threat to us” than the weak economy. 
 
 “If the supercommittee fails, I think there will be a stark realization by every member of the U.S. Senate that we’re at the end of the year and these complex challenges have not been dealt with,” Sessions said. “It’s likely to be a really difficult period.” 
 
 The policy battle comes as the parties are gearing up for a high-stakes election season dominated by economic concerns, with both the White House and Congress in play. The political pressure that has helped keep the 12-member supercommittee from compromising on hot-button issues such as taxes is sure to grow more intense. 
 
 The panel remained gridlocked Saturday with the clock ticking toward a deadline of midnight Monday. Although the official deadline is midnight Wednesday, the committee is legally barred from voting on any plan that was not made public at least 48 hours in advance. 
 
 Republicans on the supercommittee held a conference call Saturday morning, and aides said members from both parties continued to talk by phone. But neither side was predicting a last-minute breakthrough. Instead, seven panel members booked appearances on the Sunday talk shows, as both sides readied their best arguments for why the other is at fault. 
 
 Sen. Jon Kyl (R-Ariz.), a panel member, spent the day in his Capitol office. “The hope was that even at this late date, they could take things that had been scored [by the Congressional Budget Office] and put them together,” he told reporters as he left for the evening. “That gets pretty doubtful at this point,” he said. 
 
 If the supercommittee does not finish on time, it would lose special procedural powers to push a tax-and-spending plan through a bitterly divided House and Senate, leaving congressional leaders without an easy path to compromise on the expiring provisions — and a potentially nasty holiday-season fight on their hands. 
 
 “We don’t have the answers,” Sen. Richard J. Durbin (Ill.), the No. 2 Democrat in the Senate, conceded recently as it became evident that the panel’s effort had stalled. “The supercommittee was put in place” to develop “a strategy to take us through the election” by resolving the toughest outstanding budget problems, he said. “If they don’t succeed, then we have to address these issues.” 
 
 Durbin said he is “prepared to add to the deficit at this moment” to extend the economic measures and “bring us out of this recession, to put people to work.” But many Democrats have conflicting emotions about the measures, especially the one-year payroll tax cut. 
 
 In addition to adding more than $100 billion to budget deficits, the tax cut would reduce Social Security’s dedicated financing stream, making the program dependent on congressional appropriations at a critical moment. 
 
 “There are a lot of other casualties that will be collateral damage with the failure of the supercommittee,” said Rep. Gerald E. Connolly (D-Va.), a key House moderate, adding that the payroll tax cut would be a particularly “heavy lift.” 
 
 “You don’t want to do anything at this juncture to retard what seems like it’s an uptick in the economic growth,” Connolly said. “But on the other hand, we’re worried about Social Security. Do we really want to be starving it of revenue?” 
 
 Republicans are also divided. Rep. Nan A.S. Hayworth (N.Y.) said she is “extremely sympathetic to extending” the payroll tax holiday, but Rep. Jason Chaffetz (Utah) said he would have trouble supporting it without matching cuts in spending. 
 
 “I’m in favor of lower taxes. But, when you don’t couple it with a spending decrease, it’s a real problem,” Chaffetz said. “And we don’t seem to be able to cut anything around here.” 
 
 President Obama has demanded a more ambitious economic package that would, among other things, expand the payroll tax cut to employers as well as workers and overhaul the unemployment insurance system. In September, he called on the supercommittee to come up with a way to cover the $447 billion cost so the package wouldn’t increase budget deficits. Obama suggested raising taxes on corporations and the wealthy. 
 
 Democrats on the supercommittee pressed to use savings from the drawdown of troops in Iraq and Afghanistan to cover the cost of economic measures. But Republicans on the panel wanted to use the war savings to cover the cost of fixing the alternative minimum tax (AMT) and protecting payments to doctors who see Medicare patients. 
 
 Without the political cover of a supercommittee deal to reduce borrowing by the $1.2 trillion target, aides in both parties say it would be difficult to claim savings for any purpose from what some lawmakers have taken to calling “the overseas contingency account.” Because the decision has been made to bring the troops home, many budget analysts argue that the money — as much as $900 billion over the next decade — was never going to be spent anyway. Using war savings to “pay for” other priorities is therefore widely considered an accounting gimmick that is unlikely to pass muster in the House or the Senate. 
 
 While December is shaping up as a critical month, lobbyists and senior aides say they expect lawmakers to put off some decisions until next year. For example, although the inflation adjustment for the AMT is set to expire on Dec. 31, most people would not have to pay the higher tax until April 2013. That leaves plenty of time for Congress to fix it. 
 
 Dozens of expiring tax breaks for businesses and individuals, collectively known as the “tax extenders,” also could be revived retroactively. 
 
 Lawmakers may want to delay debate on the tax extenders for another reason, said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan watchdog group. Many of the breaks are designed to benefit narrow home-state interests, such as NASCAR racetracks, racehorse breeders and ethanol producers. Those are precisely the sorts of provisions that have been excoriated throughout this year’s debate over the debt. Both parties are now firmly on record as being in favor of a simpler tax code, stripped of such items. 
 
 Said Ellis: “To have gone through this whole wailing and rending of garments and gnashing of teeth that the supercommittee process has elicited and then to turn around and increase the deficit by extending a bunch of tax breaks — many of which are for special interests — would just look terrible.”
– Massive unemployment is putting a strain on state benefit funds, and states in turn are trying to recoup the money by raising taxes on employers. In all, 36 states have raised payroll taxes, a strategy that critics say will backfire by putting a crimp on hiring. “Everything’s going up, and business is going down,” one Virginia employer tells USA Today. In that state, taxes have gone up from $95 per employee in 2009 to $171 in 2010. The increases range from a few dollars in some states to nearly $1,000 per worker in Hawaii. "We don't want to pick this moment of all moments to boost taxes on employers," says an economist at the Brookings Institution. "We want to encourage employers as much as possible to add to their payrolls." Times are tough, however: Twenty-five states have borrowed a total of $25 billion from the federal government to keep up with jobless benefits, and another nine will be in the red by mid-year, reports ProPublica.