Payroll Tax Cut: Obama Hopeful Regarding Extension, But Says Fight Not Over

 @DanRivoli
on February 14 2012 1:59 PM
  • Barack Obama
    President Barack Obama Tuesday gave a speech pressuring Congress to extend a payroll tax cut until the end of 2012. Jason Reed / Reuters
  • U.S. Tax Policy
    President Barack Obama Tuesday at a White House event to pressure Congress to extend a payroll tax cut until the end of 2012. REUTERS
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President Barack Obama Tuesday pressed Congress to extend a pay roll tax cut a day, building up a public support for the measure a day after House GOP leadership caved on a plan to offset the costs with cuts to federal spending.

They need to do it now, without drama and without delay, Obama said of the extension. The good news is over the last couple of days, we've seen some hopeful signs in Congress that they realize that they've got to get this done and you're starting to hear voices talk about how can we go ahead and make this happen in a timely way on behalf of the American people.

Payroll Tax Cut Expires March 1

The payroll tax cut is set to expire at the end of February, after Congress in December extended the cut for two months. The negotiations between the two parties are centered on ways to pay for the payroll tax cut, which saves an American family making $50,000 a year $40 per paycheck.

Republicans who control the House want spending cuts to entirely fund the extension, while Senate Democrats are pushing for a small surtax on millionaires.

But Republicans Monday backed off and announced a back-up plan to extend the payroll tax cut for 10-months without funding it. House leadership in a statement blamed Senate Democrats for rejecting spending cuts and maintained that their plan would prevent Democrats from imposing job-threatening tax hikes on small business job creators.

White House Press Secretary Jay Carney Monday said Obama prefers that another extension of the payroll tax cut is passed along with unemployment benefits and a doc fix that will prevent a deep cut to doctors who treat Medicare patients. Carney said Obama wants to work with House leadership to find reasonable ways to offset the payroll tax cut extension.

Obama Capitalizes on Payroll Tax Cut

Even with House leadership's Monday announcement, Obama said an extension was far from a sure thing.

You can't take anything for granted here in Washington until my signature is actually on it, he said.

The president attempted to capitalize on the popular proposal. Republicans in December saw firsthand the backlash that comes with holding up an extension.

During his remarks, he urged Americans to call and write their lawmakers in Washington, and to go on Twitter to show what an extra $40 a paycheck means to them.

Do not let up until this thing gets done, Obama said. Don't let taxes go up on 160 million working Americans.

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