Reducing the payroll-tax cut for workers by about 20% -- to $400 per individual or $800 per family -- also diminishes another element that was expected to help the economy in the first half of this year.
State and local governments, which generally face balanced-budget requirements, are confronting sharp budget cuts as revenues decline. Aid to state and local governments was pared by more than $30 billion, to $44 billion, in the latest stimulus agreement.
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