December 3, 2011 / 11:03 AM / 6 years ago

Obama tries to pressure Republicans on tax cut

President Barack Obama speaks during the White House Tribal Nations Conference at the Department of the Interior in Washington December 2, 2011.Kevin Lamarque

WASHINGTON (Reuters) - President Barack Obama sought on Saturday to boost pressure on Republican lawmakers to back an extension of a tax cut for workers that he views as vital to help the fragile economy.

Obama's proposal to renew a temporary payroll tax holiday has received a lukewarm reception from Republicans who say it would not do much to spur economic growth and would weaken the Social Security retirement program.

Without congressional action by the end of the year, the payroll tax would revert to 6.2 percent from the current rate of 4.2 percent.

Obama, whose 2012 re-election chances hinge largely on whether he can spur economic recovery and curb high unemployment, has warned that failure to extend the cut would deal a huge blow to the economy.

"Now is the time to step on the gas, not slam on the brakes," Obama said in his weekly radio and Internet address. "Unfortunately, too many Republicans in Congress don't seem to share that same sense of urgency."

In an attempt to rally support for his effort, Obama urged Americans to visit the White House website to calculate how their household incomes would be affected by the expiration of the payroll tax cut.

"Try it out. Then let your members of Congress know where you stand," Obama said, adding that the average family would see their tax bills go up by $1,000 if the tax cut lapses.

The radio address was the latest in a series of public remarks Obama has been making to try to boost support for the payroll tax cut.

Obama, who proposes to pay for the measure with higher taxes on wealthier Americans, has taken on an increasingly populist tone.

He will try to keep the heat on Republicans when he gives a speech on Tuesday in Osawatomie, Kansas, the town where President Theodore Roosevelt gave his landmark "New Nationalism" speech in 1910 that hailed the government's role in promoting social justice and helping the poor, and also warned against the excesses of rich business interests.

"He'll lay out the choice we face between a country in which too few do well while too many struggle to get by and one where we're all in it together - where everyone engages in fair play, everyone does their fair share," the White House said.

REPUBLICAN DIVISIONS

On Thursday, the Senate defeated competing versions of legislation that would have extended the payroll tax cut, exposing divisions among Republicans as many declined to back a version of the bill put forth by their leadership.

While many Republicans are unenthusiastic about the payroll tax cut, others worry they could suffer fallout in congressional and presidential elections in November next year if they are seen as blocking a tax reduction for middle-class Americans.

Obama is grappling with weak approval ratings because of the lackluster economy and high unemployment. Any improvement in the economy would help his chances of winning another four-year term in office.

On Friday, the Labor Department reported the unemployment rate fell to 8.6 percent in November from 9 percent in October, offering a hopeful sign for the economy. But employers added workers at a modest pace of 120,000, suggesting the labor market still lacked vigor.

After gaining little traction for his efforts to pass in full the $447 billion jobs he unveiled in September, Obama is making an aggressive push on parts of the bill such as the payroll tax cut and an extension of jobless benefits that he sees as having the greatest chance of passage.

Additional reporting by Matt Spetalnick; Writing by Caren Bohan; Editing by Chris Wilson and Vicki Allen

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