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Obama accuses GOP of hypocrisy in payroll tax fight


President Barack Obama suggested Monday that congressional Republicans were acting hypocritically by opposing an extension and expansion of a payroll tax cut set to expire at the end of this year.

The president assailed the GOP in a statement at the White House, accusing them of reneging on a pledge to not raise taxes by voting against a Democratic proposal that would cut extend the tax cut in 2012, and pay for it by a surtax on the wealthy.

"Now, some Republicans who have pushed back against the idea of extending this payroll tax cut have said you’ve got to pay for this tax cut.  I'd just like to point out they haven't always felt that way," Obama said.

"Over the last decade, they didn't feel the need to pay for massive tax cuts for the wealthiest Americans ... Indeed, when the Republicans took over the House at the beginning of this year, they explicitly changed the rules to say that tax cuts don't have to be paid for. So forgive me a little bit of confusion when I hear folks insisting on tax cuts being paid for."

Democrats and Republicans on Capitol Hill are feuding over whether to extend and expand the one-year payroll tax cut authorized last year by Congress as part of a year-end package to extend the expiring Bush tax cuts, as well.

Obama called for cutting the payroll tax even deeper in 2012 as part of his American Jobs Act, and extending it to employers as well. The Senate voted on a version of that proposal last week, but fell short of the 60 votes needed to proceed when a handful of Democrats joined Republicans in opposition to the plan.

But there isn't even Republican unanimity on extending the tax cut. A GOP proposal to extend the tax cut -- financed by cuts to the federal workforce, a freeze in pay, and means-testing certain benefits -- failed 20 to 78 when a number of Republicans joined Democrats in opposition to the plan. Some Republicans worry that continuing the payroll tax cut, which funds Social Security, would worsen the entitlement program's already troubled finances.

The fight now revolves around how to finance the extended tax cut in a way that can win support in both parties. Obama said he's willing to work with Republicans to extend the tax cut in a "responsible" way.

"What I'm not willing to do is pay for the extension in a way that actually hurts the economy," he said.

Senate Democrats unveiled a new proposal Monday that scales back the scope of the tax cut extension, but still largely relies on a surtax on high earners to pay for the cuts. Republicans reject this surtax as a "poison pill," though it may indicate that both sides of the aisle are moving toward a compromise, especially as they work to finish up legislative business for the year.

"If the president wants to make progress, he should insist that Senate Democrats remove the job-killing small business tax hike from their partisan proposal," snapped Michael Steele, spokesman for Republican House Speaker John Boehner in a statement following the president's address.

Electoral politics compose part of the backdrop for the fight, too. The White House has pummeled Republicans throughout the fall for opposing different elements of the president's jobs plan, from infrastructure investments to the tax fight currently before lawmakers. Each vote on these components, Democrats are betting, puts Republicans in a tough spot heading into an election year that's focused squarely on economic issues.

"I know many Republicans have sworn an oath to never raise taxes as long as they live," Obama said Monday. "How could it be that the only time there's a catch is when it comes to raising taxes on middle class families? 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?"

The president also urged lawmakers to extend expired unemployment benefits. Failing to do that "would to extraordinary harm to the economy," Obama warned.

This item was last updated at 2:38 p.m.

President Obama says Congress needs to extend a payroll tax cut, saying the economic recovery is "still fragile" and middle class families need the money. Watch his entire statement.