To Americans lucky enough to have maintained their pre-recession standards of living, or perhaps even flourished, $1000 may seem a pittance. But to those who are struggling to hold on, that figure might represent a month’s rent, several months of electricity bill payments or a couple of months’ worth of groceries. President Obama says those are the people he’s fighting for in his push to get Congress to pass a bill to extend the payroll tax cut set to expire at the end of the year. If Congress allows the sun to set on this tax cut, the average household will have to pay $1,000 in additional taxes.
"As soon as this year ends, so does that tax cut. There aren't many folks, either in the middle class or those trying to get into the middle class, who can afford to give up $1,000 right now. That's why Congress must act," Obama said in remarks Monday afternoon from the White House briefing room, where a countdown clock has been installed to mark how much time is left for lawmakers to pass a bill.
Senate Democrats have put together a plan to pay for the tax cut with a combination of spending cuts and what Senate majority leader Harry Reid (D-Nevada) described as a “tiny, tiny surtax” on millionaires. Last week the Senate rejected bills from both Republican and Democrats. The sticking point is how to pay for the extension.
“Now, 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?” Obama said. “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? It doesn’t make sense.”
The president also warned lawmakers against going home for Christmas without extending the unemployment insurance program also set to expire on Dec. 31, citing independent economists who say that not extending the program would harm the economy because people don’t normally save their unemployment compensation and instead spend it almost immediately.
“It will take money out of the pockets of Americans just at a time when they need it. It will harm businesses that depend on the spending just at the time when the economy is trying to get some traction in this recovery. It will hurt all of us. And it will be a self-inflicted wound,” Obama said.
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(Photo: John Moore/Getty Images)