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Obama Says He Sees Give by Republican Lawmakers on Payroll Tax

December 06, 2011

(For more 2012 campaign news, see {ELECT}.)

Nov. 30 (Bloomberg) -- President Barack Obama said tonight Republican lawmakers are showing a willingness to extend a temporary payroll tax cut, a move that could spare the U.S. economy what he earlier said would be a “massive blow” if Congress lets the payroll tax cut expire at the year’s end.

Referring to House Speaker John Boehner of Ohio and Senate Minority Leader Mitch McConnell of Kentucky, Obama said “over the last couple of days” they “have both indicated that it probably does make sense not to have taxes go up for middle- class families, particularly since they’ve all taken an oath not to raise taxes.”

The Republican leaders consistently have opposed tax increases in negotiations with Obama over the government’s finances, and many Republican lawmakers have signed a no-tax- increase pledge promoted by activist Grover Norquist. The president made his remarks at a New York City fundraiser attended by about 45 people who paid $35,800 and included leading Wall Street figures.

“It’s possible that we see some additional progress over the next couple of weeks,” he said.

Guests included Mark Gallogly, a managing principal of Centerbridge Partners, Deven Parekh, a venture capitalist with New York-based Insight Venture Partners, and Orin Kramer of Boston Provident Partners LP.

Obama also addressed Europe’s economic problems, saying he is “cautiously hopeful that they end up recognizing that they need to do the right thing and we’re providing them as much assistance as we can.”

Scranton Visit

Earlier today, speaking at a high school in Scranton, Pennsylvania, Obama said Republicans face a choice: “Are you going to cut taxes for the 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?”

Congress plans to debate in coming weeks how to extend the payroll tax cut for employees, with Republicans and Democrats differing over whether to offset the revenue loss by raising taxes on the wealthiest Americans or cutting the federal budget more deeply.

In Scranton, a former manufacturing hub in northeastern Pennsylvania, Obama said, “There’s a sense of deep frustration among people who’ve done the right thing but don’t see that hard work and that responsibility pay off.”

From there, Obama flew to New York for a trio of fundraisers that were expected to raise at least $2.4 million.

The president addressed U.S.-Israeli relations at the upper east side townhouse of Jack Rosen, chairman of the American Jewish Congress and a member of the executive committee of the American Israel Public Affairs Committee.

Jewish Community

In Rosen’s introduction of Obama to about 30 people who paid at least $10,000 each, according to a Democratic Party official, he said many in the Jewish community are “concerned” about U.S.-Israeli relations. He told the president that “we want to see more hope and we want to see more change” in 2012, while also saying Republicans in Congress have blocked many of Obama’s policies.

“This administration has done more for the security of Israel than any previous administration,” Obama said. “No ally is more important than the state of Israel.”

Rosen, who also is the chairman of the American Council for World Jewry, told Obama he was “amongst friends.”

Republican presidential candidates have been critical of Obama over U.S. relations with Israel. Former Massachusetts Governor Mitt Romney said in September that the president had thrown Israel “under the bus and undermined its negotiating position.”

Holiday-Themed Party

The president ended the day at a holiday-themed party at the Sheraton Hotel with approximately 500 people who paid $1,000 each.

In Scranton, Obama brought his message to a key constituency of voters in a longtime Democratic congressional district that sent a Republican to the House in the 2010 elections.

“People have looked to Scranton to see what middle-class, blue-collar America is thinking,” said Jean Harris, head of the political science department at the University of Scranton. “And if he can get here early and get people talking about him in a positive way, they’re probably hoping it’s going to snowball.”

Obama has reported raising $88 million through Sept. 30, exceeding his record fundraising pace of four years ago. By comparison, Romney, the top fundraiser among the Republicans seeking their party’s nomination, reported taking in $33.6 million.

Seeking a Repeat

Since officially kicking off his re-election campaign in April, Obama has focused on states that he won in 2008 and needs to hold to get re-elected. Among them is Pennsylvania, which Obama has visited 16 times since he took office, including six stops over the last seven months. Vice President Joe Biden, who grew up in Scranton, also has visited the area.

Pennsylvania should be friendly territory for Obama. There are about four registered Democrats for every three Republicans in the state, and Democrats outnumber Republicans 2-1 in Lackawanna County, of which Scranton is the hub, according to the Pennsylvania Department of State.

In the last five elections, Pennsylvania voters have supported the Democratic nominee for president, including giving Obama 54.5 percent of the vote in 2008.

Republican Gains

Still, Republicans took Pennsylvania’s governorship, a U.S. Senate seat and five U.S. House seats from Democrats in the 2010 elections.

One of those House seats went to Republican Representative Lou Barletta, who defeated 13-term incumbent Democrat Paul Kanjorski in the district that includes Scranton. Barletta said he doesn’t think Obama can take the area for granted.

“In 2008, the president won here in northeastern Pennsylvania by 15 points; however, I won by 10 points in 2010, so you can draw your own conclusion as to how the president’s doing here in northeastern Pennsylvania,” Barletta said in an interview.

Rick Schraeder, president of the local electrical workers union, said he voted for Obama in 2008 and will again in 2012. Still, he said “any one of” the Republican candidates seeking their party’s nomination could pose a challenge to Obama.

“We can’t take anything for granted, we’re going to have to work hard to get the people in there that are going to support the middle class,” he said.

Pennsylvania’s Economy

Pennsylvania’s unemployment rate was 8.1 percent in October, below the national average of 9 percent that month. The metropolitan area that includes Scranton had an 8.8 percent unemployment rate in September, according to Labor Department data compiled by Bloomberg.

Pennsylvania’s economic health improved 1.9 percent during the year ended June 30, 15th-best among 50 states and Washington, D.C., according to the Bloomberg Economic Evaluation of States Index, which uses data on real estate, jobs, taxes and stock prices to gauge growth.

Schraeder is urging his union’s approximately 500 members to “wake up” and vote for Obama in 2012.

“A lot of our workers realize now that we’re down to it; it’s not a special-interest item anymore, it’s not a gun, it’s not an abortion, it’s not a gay thing,” said Schraeder, 61. “We need to put food on our tables, we need a livable wage.”

--With assistance from Richard Rubin and James Rowley in Washington. Editors: Jim Rubin, Don Frederick

To contact the reporter on this story: Kate Andersen Brower in Scranton, Pennsylvania, at

To contact the editor responsible for this story: Mark Silva at

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