Obama urges payroll tax cut extension

US President Barack Obama urged Congress Saturday to extend a payroll tax cut due to expire at the end of the year in order to stimulate the country's battered economy and job creation. "Put money back in the pockets of working Americans. Pass these tax cuts," the president said in his weekly radio and Internet address. He pointed out that last year, Democratic and Republican members of Congress had come together to cut payroll taxes for middle-class families by about $1,000.
But the tax cut is set to expire at the end of this month, Obama recalled. And if this is allowed to happen, working families will see their taxes go up. "We can't let that happen," said the president. "In fact, I think we should cut taxes on working families and small business owners even more." The comment came as the White House received a substantial confidence boost on Friday, as unemployment sank to a 32-month low of 8.6 percent in November.
Official figures showed the jobless rate fell sharply from 9.0 percent the previous month, as the economy created 120,000 new jobs. After a year that saw joblessness linger around 9.0 percent, the report was welcomed with relief. But while the Labour Department's report was one of the strongest since the global economic crisis began in 2008, it was not uniformly positive.
Economists pointed to a worryingly sharp drop in the number of people looking for work - which helped push down the unemployment rate further than would have been the case. That could mean more and more jobseekers feel defeated by the relentless slog of finding a new position and are dropping out of the hunt altogether.
While generally agreeing on the need to extend the tax cut, Republicans and Democrats in Congress sharply disagree on how to pay for it. Democrats have proposed paying for the extension by introducing a surtax on incomes over $1 million. Republicans, who have long supported tax cuts across the board, say this one does not help stimulate the economy and do not want to tax the rich.