Dec. 3 (Bloomberg) -- President Barack Obama said members of Congress “shouldn’t go home for the holidays” until they extend a payroll tax cut that is needed to maintain and strengthen U.S. economic growth.
The Labor Department yesterday said the jobless rate fell to 8.6 percent in November from 9 percent the month before after employers added 120,000 jobs and 315,000 Americans left the labor force. The unemployment rate was the lowest since March 2009.
“Now is the time to step on the gas, not slam on the brakes,” Obama said today in his weekly radio and Internet address. “Unfortunately, too many Republicans in Congress don’t seem to share that same sense of urgency.”
Unless Congress acts, the tax cut -- which lowered the employee portion of the Social Security payroll tax from 6.2 percent to 4.2 percent for 2011 -- will expire Dec. 31. Obama said in his address that the tax cut saves the typical middle class family $1,000 a year.
On a Nov. 30 trip to Scranton, Pennsylvania, Obama said letting the payroll tax cut expire “would be a massive blow to the economy.”
This year’s tax break cost the government $111.7 billion in forgone revenue, according to the congressional Joint Committee on Taxation. The U.S. transferred money from the general fund to cover the reduced funding for Social Security.
On Dec. 1, the Democrat-controlled U.S. Senate rejected a Democratic proposal that would have imposed a 3.25 percent surtax on annual income exceeding $1 million to pay for extending the payroll tax cut and expanding it to employers.
The Senate also rejected a separate Republican measure that would have extended the payroll tax cut for employees for one year and offset the cost by reducing the federal work force by 10 percent, freezing federal pay through 2015 and requiring high earners to pay more for Medicare premiums.
“This week, they actually said ‘no’ to cutting taxes for middle-class families,” Democrat Obama said in the address.
The Republican-controlled House hasn’t scheduled a vote on an extension.
Senator Olympia Snowe of Maine, in the weekly Republican address, urged supporters of the balanced-budget amendment, which she said will help curb the $15 trillion national debt, to call their lawmakers and tell them to vote for the measure when it comes before the Senate this month.
Cost of Status Quo
“The impending vote to amend the Constitution represents a choice between changing business as usual in Washington, or embracing the status quo that we can no longer afford,” Snowe said. “The status quo that has led to an inexcusable 950 straight days without passing a federal budget, the status quo that has brought us the first ever downgrade of America’s sterling triple-A credit rating.”
Under the debt ceiling agreement reached in August the House and the Senate must vote on the balanced-budget amendment before the end of the year. An effort to pass the measure in the House failed on Nov. 18.
To get through Congress, a constitutional amendment requires a two-thirds vote rather than a simple majority; it then must be ratified by three-fourths of the states.
In the Republican address, Snowe said that Congress’s intransigence is “exemplified” by the failure of the supercommittee to reach an agreement by Nov. 23 to reduce the deficit by $1.2 trillion over the next 10 years.
“Even the automatic cuts resulting from the supercommittee’s failure to reach an agreement could all be undone by this or any future Congress -- unless we pass a balanced budget amendment like those already adopted by 49 other states,” she said.
--With assistance from Brian Faler, Steven Sloan and Richard Rubin in Washington. Editors: Ann Hughey, Paul Tighe
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