Hyperventilation then damage....

The agreement that Congress came to before they snuck out of town was absurd on its face.   It continues the extension of unemployment benefits and the 2% reduction in Social Security taxes for two months. In his victory statement the President claimed that the average worker would save $1000 as a result of the agreement but that is a gross misrepresentation.  The real savings, based on average wages, will be about $20 per week or the price of five lattes in a week.  For the eight weeks of the extension that amounts to about $160, not the $1000 claimed by the President.

Besides politics what are the possible benefits of the temporary bill (or even the permanent one)?

An aggregate increase in demand - If the first version of this actually had a positive effect economic activity would have been  increasing proportionally - but it has not.   In many key areas of the economy growth is stagnant.  The stimulus bill has been a drag on economic growth.  Adding to that has been the uncertainty about tax policy - as John Taylor argued earlier in the week, the best tax policy is a stable one.  Like the original Bush Tax Cuts which the President likes to defame - uncertain tax policy tends to diminish the real incentive effects of any change.   This sixty day extension is a fantasy in terms of stimulative effect.

Employment growth - Labor force participation continues to trend down.  That has been caused in part by extended unemployment benefits - what seems like a humane policy is actually holding many people in dependency.   Were labor force participation at levels before this recession - the unemployment rate would be over 11%.

But as any good pitchman from TV would say - there is even more - The best description of the American political class on its response to issues in the Social Security System has been derelict at best.  This solution makes the long term viability even less certain - at the same time it increases the notion that Americans are entitled to something without contributing to it.  Neither is a consequence that is good for the long term.

The GOP should have stuck to its guns and tied the real growth in employment that would have resulted from the pipeline with a year long extension of the rate for FICA taxes.  This was not a proud moment for the American political system.