–Urges Extension Of Payroll Tax Cuts, UI; Inaction Is Risk To Economy

By Brai Odion-Esene

WASHINGTON (MNI) – President Barack Obama Monday said the recovery
in the United States remains fragile, with the problems in Europe
amplifying the uncertainty around the economic outlook, making it even
more important that Congress acts to extend both the payrolls tax cut
and unemployment benefits.

“My single greatest priority right now is doing everything that I
can, every single day, to create jobs faster and to provide more
security for middle class families,” Obama said in a statement from the
James Brady press room.

This means ensuring that 160 million Americans do not see their tax
rates go up on January 1st of next year, the president said.

“Although the unemployment rate went down last month, our recovery
is still fragile and the situation in Europe has added to that
uncertainty,” Obama said.

“We are going through what is still an extraordinary time in this
country and in this economy,” he said.

The U.S. Treasury Friday announced that Treasury Secretary Timothy
Geithner will travel to Europe December 6-8, 2011, “for discussions with
his counterparts on their efforts to reinforce the institutions of the
euro area.”

He will meet with, among others, French President Nicolas Sarkozy,
German Finance Minister Wolfgang Schauble and ECB President Mario
Draghi.

In his regular briefing with members of the press following the
announcement, White House Press Secretary Jay Carney said Geithner’s
trip to Europe underscored the fact that the Euro area’s success in
tackling the debt crisis “is of great importance” to the United States.

“This is the continuation of a process that we have been engaged in
for many weeks and months now,” Carney said.

Obama emphasized the importance of extending unemployment benefits,
saying, “We cannot play games with unemployment insurance when we still
have an unemployment rate that is way too high.”

Failing to extend either of these, he warned, would mean an economy
that does not grow as quickly and job creation will see slow
improvement.

The bill to extend the payroll tax cut for workers and expand the
cuts to employers was defeated in the Senate last week Thursday on 51-49
vote.

Obama said he hoped Republicans would end their opposition to
extending the tax cuts, noting that some in the GOP leadership appear to
be shifting in that direction.

To pay for the cuts, the bill would have imposed a 3.25% surcharge,
or “millionaire’s tax,” on Americans with income over $1 million. The
alternative plan put forward by Republicans — which would have extended
the payroll tax cuts for one year — was paid for by a freeze in federal
workers’ pay together and trimming more federal jobs while also raising
Medicare costs for those with incomes above $750,000 a year.

Obama said he is willing to work with the opposition on raising the
tax cut in a responsible manner. “What I am not willing to do is to pay
for the extension in a way that actually hurts the economy,” he warned.

Making deep cuts now in areas that are critical to the economy just
to extend the tax cuts would be irresponsible, Obama said, as would
attempting to undo the budget agreement he signed into law in August.

** Market News International Washington Bureau: 202-371-2121 **

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