Obama urges payroll tax cut extension

WASHINGTON (AP) — President Barack Obama is pressuring Congress to extend a payroll tax cut for the rest of the year as another deadline nears for Congress to act or see taxes go up for millions of working people.

Lawmakers agreed in December, after much bickering, on a two-month extension, but that runs out at the end of this month. Obama said in his weekly radio and Internet address Saturday that Congress "needs to stop this middle-class tax hike from happening. Period. No drama. No delay."

Obama said the economic recovery must not be jeopardized by a failure to stop payroll taxes from rising, and he urged listeners to add their voices.

"I hope you'll pick up the phone, send a tweet, write an email, and tell your representative that they should get this done before it gets too late. Tell them not to play politics again by linking this debate to unrelated issues. Tell them not to manufacture another needless standoff or crisis," Obama said. "Tell them not to stand in the way of the recovery. Tell them to just do their job. That's what our middle class needs. That's what our country needs."

Lawmakers have made halting progress on legislation to extend the tax cut. The bill also would renew jobless benefits for the long-term unemployed and prevent doctors from a 27 percent cut in their Medicare payments. But the plan costs $150 billion-plus and lawmakers will have to find a way to pay for it.

The 2 percentage point cut in Social Security taxes is worth about $1,000 per year for the average family, or $40 per paycheck.

In the Republican radio address, Virginia Gov. Bob McDonnell applauded efforts by Republican governors across the country to contain government spending and reduce their state budget deficits. Speaking ahead of Obama's release Monday of his 2013 budget, McDonnell said the federal budget will impede job creation by calling for tax increases and for continuing the administration's health care policies.

Obama's budget would allow Bush-era tax cuts for people in the upper brackets to expire. It also is expected to call for the elimination of corporate tax loopholes while calling for lower corporate tax rates.

McDonnell said Republicans can help create an environment that creates and sustains private sector jobs.

"We know that when we limit government to free up capital, and reduce onerous regulations and litigation, we spur private sector job creation."