A day after proposing to raise taxes by nearly $2 trillion over the next decade, President Obama on Tuesday called on Congress to extend a payroll-tax cut for 160 million workers, saying middle-class families can’t afford a tax increase at the moment.
“Washington shouldn’t hike taxes on working Americans right now,” Mr. Obama said at the White House. “That’s the wrong thing to do, but that’s exactly what’s going to happen … in a couple weeks if Congress doesn’t do something about it.”
House Republican leaders said Monday they are willing to approve an extension of the 2 percent payroll-tax holiday, due to expire at the end of February, without making up the lost revenue elsewhere in the budget.
Leaders in both parties in the House and Senate say they want to extend the tax cut through this year, but they have disagreed over how to pay for a larger package of provisions, including expiring unemployment benefits.
The president said the change in House Republicans’ position was “good news,” but he urged citizens to keep pressuring lawmakers to get a deal. Mr. Obama even joked that the public should make sure there’s a photograph of him signing the legislation, in an apparent reference to the controversy over his “autopen” signing of an extension of the Patriot Act in 2011.
“Until you see me sign this thing, you got to keep on speaking up,” Mr. Obama told an assembly of workers as laughter rose. “Until you see that photograph of me signing it at my desk, make sure it’s verified, certified — if it’s not on the White House website, it hasn’t happened.”
Democrats are considering their own payroll-tax cut backup plan, Sen. Charles E. Schumer, New York Democrat, told a gathering of reporters Tuesday.
“But obviously our Republican colleagues took a big step in our direction yesterday,” he said. “We take this as a sign that our Republican colleagues read the handwriting on the wall.”
Mr. Schumer wouldn’t say if he would support a House-passed payroll-tax holiday extender bill that excluded unemployment insurance and so-called “doc-fix” provisions, saying instead he is “hopeful that the conference committee will come up with a package that is complete.”
In the budget for fiscal 2013 that Mr. Obama unveiled Monday, he calls for huge tax increases on families earning $250,000 or more. In addition to hiking marginal income-tax rates, the president would raise taxes on investment income for families in the top tax bracket.
His budget also would end the payroll-tax holiday on Dec. 31, meaning all workers would face a tax increase on Jan. 1, 2013. But in his remarks Tuesday, the president said lawmakers must make sure they avert an imminent tax increase at the end of this month.
“That can’t happen — not now,” he said.
The president also called on lawmakers to pass an extension of unemployment insurance benefits.
“Congress needs to extend that tax cut along with vital insurance lifelines for folks who’ve lost their jobs during this recession,” he said. “They need to do it now, without drama, without delay. No ideological sideshows to gum up the works. No self-inflicted wounds. Just pass this middle-class tax cut, pass the extension of unemployment insurance, do it before it’s too late, and I will sign it right away.”
Mr. Obama referred to promising economic news, including a drop in the unemployment rate in January to 8.3 percent, as evidence that his policies are working.
“The fight is beginning to turn our way,” he said. “Our economy is growing stronger. The last thing we need is for Washington to stand in the way of America’s comeback.”
• Sean Lengell contributed to this report.
• Dave Boyer can be reached at email@example.com.
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