Fri, Dec 02, 2011 - Page 7 News List

Obama optimistic about tax cuts agreement

DIFFICULT TIME:The US president needs to get the cooperation of Republicans to raise taxes of wealthy Americans in order to cut payroll taxes for the poor

Reuters, NEW YORK

US President Barack Obama struck an optimistic note on Wednesday night that lawmakers in the US Congress could reach agreement to extend payroll tax cuts he said earlier were needed to avoid a “massive blow” to the economy.

At a fundraiser at a New York restaurant, the Democrat said Republican congressional leaders John Boehner and Mitch McConnell had indicated in the past few days they were open to the one-year extension that Obama wants to bolster the economy.

“It is possible that we see some additional progress over the next couple of weeks that can continue to help strengthen the economy and get us through what has been a very difficult period, not just for the United States, but obviously for the world economy,” Obama told the campaign event.

However, he warned the US economy faced “a lot of headwinds” and that “Europe is probably the biggest one.”

“I spend an awful lot of time making transatlantic calls because if you look at what is happening in Europe, both to the banks and for countries like Italy that need to refinance their debt, that can have a profound impact on what happens here,” he told the crowd of about 45, who paid US$35,800 each to attend.

Obama’s upbeat tone on payroll taxes marked a pivot from his campaign-style rally earlier in the day in Scranton, Pennsylvania, a battleground state considered crucial to his re-election chances in next year’s presidential election.

He told nearly 2,000 students and voters there he wanted to finance the payroll tax proposal by raising taxes on wealthier US citizens, challenging Republicans to make a choice in a congressional vote he said could come as early as Friday.

“Are you going to cut taxes for middle class and those who are trying to get into the middle class, or are you going to protect massive tax breaks for millionaires and billionaires?” he asked, striking a populist tone on a visit to the blue-collar town.

Republicans, who are seeking to blunt Democratic charges of favoring the rich over the middle class before next year’s vote, rolled out their own plan to cover the cost of extending the payroll tax cuts.

Under the Republican plan unveiled on Wednesday, the tax-cut extension would be funded mainly by reducing the number of federal workers and extending a pay freeze for them for three more years.

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