“There’s no reason why we shouldn’t be able to extend these items — the payroll tax cut, [unemployment insurance] — before the holidays. There’s no reason the government should shut down over this,” Obama said during remarks at a “We Can’t Wait” event at the White House. “I expect all of us to do what’s necessary in order to do the people’s business and make sure that it’s done before the end of the year.”
The president pressed lawmakers to extend the payroll tax cut before it expires at the end of the year and warned that if they don’t, 160 million middle class Americans would see their taxes go up on Jan. 1.
‘’Congress should not and cannot go on vacation before they have made sure that working families aren’t seeing their taxes go up by $1,000 and those who are out there looking for work don’t see their unemployment insurance expire,’’ President Barack Obama said Thursday as he encouraged Congress to reach a compromise.
Administration officials said they would insist that the payroll tax holiday be extended to prevent damage to the struggling economy.
As the Senate convened Thursday, Kentucky Sen. Mitch McConnell, the Republican leader, said he was ‘‘confident and optimistic’’ that Congress would be able to pass a huge spending measure and continue the payroll tax break before adjourning for the holidays. It was a departure from the previous day, when he asserted that Democrats ‘‘obviously want to have the government shut down.’’
Sen. Harry Reid of Nevada, the majority leader, also sounded more hopeful, saying that he and McConnell intended to ‘‘come up with something that will get us out of here at a reasonable time in the next few days.’’
For weeks, Republicans and Democrats have been fighting over how to pay for an extension of a payroll tax holiday for 160 million U.S. workers, one that will expire at the end of the year if Congress does not take action. That measure has become linked to a large spending bill that would keep the government financed through the rest of the fiscal year.
While both sides have spent much of the week trying to outmaneuver one another and gain the political high ground, Thursday seemed to presage the second stage of what has become a familiar pattern in the 112th Congress — the ratcheting back of Stage 1, which is recriminations via press conference — on the road to Stage 3: a final, grudging compromise.
At a minimum, the Senate, which has until Dec. 31 to act on the payroll tax before it reverts to a higher level, will seek a two-month stopgap extension of the payroll tax holiday, unemployment insurance and Medicare payment rates for doctors, at a cost of an estimated $40 billion. Senate leaders were still hoping to reach a deal on a longer-term plan.
While Democrats have dropped their idea of imposing a surtax on income of more than $1 million, they are now considering a plan that would find savings in other ways, including fees on the federal housing finance agencies, and could seek to end certain deductions and other tax benefits for millionaires.
Staff members on both sides began poring through the 800-page spending bill, preparing for a vote as early as Friday, although the entire process is expected to bleed into the weekend. Republican leaders in the House said there would be a meeting Friday morning with their members to discuss the plan.
The White House declined to allow Democrats to sign off on the bill until restrictions on travel to Cuba were removed. Rep. Jose E. Serrano, D-N.Y., a senior member of the House Appropriations Committee, said the proposed restrictions had been ‘‘the one last sticking point’’ in negotiations on the omnibus spending bill. Republicans wanted to reinstate restrictions on travel to Cuba and remittances sent there from the United States. Since Obama relaxed the restrictions in 2009, Cuba has seen a surge in visitors and remittances.
House Republicans, including Rep. Mario Diaz-Balart of Florida, sought the tougher restrictions, saying that tourist travel and remittances yielded a windfall to the Cuban government.
Speaker John A. Boehner also appeared to change his tone Thursday, saying that a solution to the deadlock on spending was in sight.
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