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Obama prods GOP on payroll tax cut

WASHINGTON (AP) — President Barack Obama accepted a move by Senate Democrats to scale back his Social Security payroll tax cut extension on Monday, then prodded Republicans to support it despite a requirement for the very wealthy to pay more taxes.

Obama also called on lawmakers to renew a program of extended unemployment benefits due to expire on Dec. 31. He said the checks, which kick in after six months of joblessness, are “the last line of defense between hardship and catastrophe” for some victims of the recession and a painfully slow recovery.

The president made his remarks at the White House as Republicans and Democrats in Congress said a holiday-season package was beginning to come into focus that could cost $180 billion or more over a decade. Elements include not only the payroll tax cut and unemployment benefit renewals, but also a provision to avert a threatened 27 percent reduction in fees to doctors who treat Medicare patients.

While there are differences over the details of the three principal components — many Republicans are reluctant to extend the tax cut — there is at least as much disagreement between senior lawmakers in the two political parties over ways to cover the cost so deficits don’t rise.

Officials said to offset the two-year, $38 billion price tag of the Medicare provision, House Republicans want to cut funds from the year-old health care legislation. Some Democrats want instead to count defense funds approved but unspent for the wars in Iraq and Afghanistan — a proposal that many GOP lawmakers deem an accounting gimmick.

The Medicare proposal enjoys strong popularity among lawmakers in both parties. House Republican leaders signaled last week they intend to include it in the overall package as a sweetener for members of the party’s rank and file who are unhappy at the prospect of extending the payroll tax cut.

GOP critics say there is no evidence the current tax cut has helped create jobs, and also say they fear the impact of a renewal on the deficit and on the fund that pays Social Security benefits. A majority of Republican senators voted lagainst a plan backed by their leadership to extend the cut.

But Obama noted House Speaker John Boehner, R-Ohio, has said that the renewal would help the economy, and said the party’s Senate leaders had made similar comments.

“I couldn’t agree more. And I hope that the rest of their Republican colleagues come around and join Democrats to pass these tax cuts and put money back into the pockets of working Americans,” the president said.

Obama also added, “I know many Republicans have sworn an oath never to raise taxes as long as they live. How could it be that the only time there’s a catch is 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?”

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