US President Barack Obama speaks on payroll tax cuts.
US President Barack Obama cranked up pressure on congressional Republicans on Monday to extend a payroll tax cut, and his fellow Democrats proposed to fund it with spending cuts and a «tiny surtax» on the rich.
Speaking at the White House, Obama said the popular tax break needs to be renewed for the sake of millions of Americans and the weak US economy.
«Although the unemployment rate went down last month, our recovery is still fragile,» Obama said in calling for renewal of the payroll tax cut set to expire at the end of this month.
At same time, Senate Majority Leader Harry Reid announced a new modified proposal that covers the cost of an extension with a «mixture of spending cuts» and a «tiny, tiny surtax» on the wealthiest citizens.
Though Reid did not immediately provide details, he said, «This is a serious proposal and Republicans should take it seriously.»
Citing public support, Reid said, «Republicans in Congress dismiss it at their peril.»
There was no immediate response from Republicans in the Senate or the House of Representatives, who have been struggling to find a unified position.
Earlier this month, Republicans were reluctant to embrace Obama’s call to extend the payroll tax cut, voicing concerns about the cost and whether it would stimulate the economy.
But with fears of a political backlash in the run-up to the November 2012 presidential and congressional elections, at least some of their leaders decided to push for an extension – provided an agreement can be reached on how to pay for it.
Without congressional action by Dec. 31, the payroll tax that workers pay to help fund the Social Security retirement program would revert to 6.2 percent, up from the current 4.2 percent tax. On average, it would cost American families about $1,000 a year.
A simple extension of current payroll tax cut for workers would cost about $110 billion next year.
buenosairesherald.com