Obama presses payroll tax cut extension
WASHINGTON — President Barack Obama chastised Republican lawmakers Monday for failing to act to extend a cut in payroll taxes set to expire at the end of the year.
In comments at the White House, Obama said Republicans were blocking the measure to avoid allowing a hike in taxes to a small group of high income earners which would offset the costs of the tax cut extension.
Senate Majority Leader Harry Reid, meanwhile, said the Democrats proposal for a tax increase on millionaires to pay for the payroll tax cuts would be scaled back, in hopes of getting Republicans on board.
Obama said the payroll tax cut represents around $1,000 a year for the average middle class family and will end at the end of December.
“If Congress fails to renew this tax cut before then, that same family will see a tax hike of about $1,000 a year,” he said.
“There aren’t many folks either in the middle class or those trying to get into the middle class who can afford to give up $1,000. Not right now. That’s why Congress must act.”
Republicans in the US legislature however, have been loath to give the Democratic president anything that might be construed as a legislative victory ahead of the November 2012 presidential election, which they hope will see Republicans reclaim the White House.
Obama said in his proposal to extend the payroll tax cut, “it was paid for by asking a little more from millionaires and billionaires.”
“A few hundred thousand people paying a little bit more could have not only extended the existing payroll tax cut but expanded it,” he added.
“Last week virtually every Senate Republican voted against that tax cut. Now, I know many Republicans have sworn an oath never to raise taxes as long as they live. How can it be the only time there’s a catch when it comes to raising taxes on middle class families?
“How can you fight tooth and nail to protect high-end tax breaks for the wealthiest Americans and yet barely lift a finger to prevent taxes going up for 160 million Americans who really need the help?”
Reid, meanwhile, said he will present a modified Democratic proposal for the payroll tax cut extension.
“It will be fully paid for with a mixture of spending cuts Republicans have already agreed to and a tiny, tiny surtax on the top 0.2 percent of American taxpayers,” he said.
“In an effort to make our proposal more palatable to Republicans, we have conceded significantly to cut the tax on income above a million dollars and make it temporary,” he said.
Obama said a failure by Congress to act would also cut unemployment insurance and will “be leaving 1.3 million Americans out in the cold” and harm the economy.
“If you believe government shouldn’t take money out of people’s pockets, I hope members of Congress realize it’s even worse when you take it out of the pockets of people who are unemployed and out there pounding the pavement looking for work,” he said.
“We cannot play games with unemployment insurance when we still have an unemployment rate that is way too high.”