Obama Urges Republicans to Extend Payroll Tax Cut

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Payroll Tax Cuts, Benefits Battle Rages on in D.C.

FBN's Peter Barnes on the ongoing debate in Washington on increasing and expanding payroll tax cuts.

President Barack Obama on Monday urged congressional Republicans to pass an extension of the payroll tax cut, saying it will "spur spending, it will spur hiring and it's the right thing to do."

In a statement to reporters in the White House briefing room, Obama blamed Republicans for defeating Democrat-backed legislation that would have paid for an extension and expansion of the tax break by asking "a little more from millionaires and billionaires."

The Senate last week rejected both Democrat and Republican versions of a bill to extend the employee payroll tax cut, which is scheduled to increase by two percentage points, to 6.2 percent, at the end of the year.

The briefing room was later outfitted with monitors displaying a countdown to that deadline in 26 days. Without an extension, taxes for the average American family will increase by about $1,000.

"There aren't many folks -- either in the middle class or trying to get into the middle class -- who can afford to give up $1,000. Not right now," Obama said.

In an argument likely to be repeated on the campaign trail, Obama accused Republicans of putting the needs of wealthy Americans above those of the middle class.

"I know many Republicans have sworn an oath never to raise taxes as long as they live." Obama said. "How can it be that the only time there is a catch is when it comes to raising taxes for 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?"

Obama also pressed Congress not to leave town for the holidays without extending unemployment insurance, which he called the "last line of defense" for out-of-work Americans.

"We cannot play games with unemployment insurance when we still have an unemployment rate that is way too high," he said.

Senate Democrats released some details of a new, scaled-back version of the payroll tax relief bill Monday in an effort to win the support of more Republicans. The new bill drops Obama's plan to expand the cut for employers and reduces a proposed new tax on millionaires, a senior Democratic aide told The Wall Street Journal.

After details of the new Democratic proposal were released, some key Republicans said the bill will not pass muster.

A spokesman for House Speaker John Boehner (R-Ohio), Michael Steel, blasted the legislation as a "partisan proposal."

"Our number one priority is the same as the America people's -- jobs," Steel said. "If the President wants to make progress, he should insist that Senate Democrats remove the job-killing small business tax hike from their partisan proposal."

Sen. Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, said the Democratic proposal was not, in fact, a compromise.

"Frankly, the only thing bipartisan about this latest political gambit is opposition to the permanent tax hike on small businesses to pay for temporary one-year tax policy," he said in a statement.