US President Barack Obama on Tuesday warned the “fragile” US economy could be impacted by a failure to extend a payroll tax cut, and called on Republicans to reverse their refusal to act now.
“Right now the recovery is fragile but it is moving in the right direction,” Obama told reporters at the White House after House Republicans blocked a Senate compromise to extend the tax break for two months.
The impasse “could have effects not only on families but on the economy as a whole,” Obama said.
The Republican-controlled House did not specifically vote down a Senate compromise on the measure, but agreed by 229 votes to 193 to appoint a team of negotiators to broker a new compromise bill with senators.
But since the unemployment benefits for around two million jobless workers expire at the end of the month, and payroll taxes are set to increase from 4.2 percent to 6.2 percent, the move sparked year-end political uproar.
“Right now the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1,” Obama said.
“Let’s not play brinksmanship, the American people are weary of it, they are tired of it… I am calling on the speaker and the House Republican leadership to bring the Senate bill up for a vote,” Obama said.