Obama, GOP continue to spar over tax cut

President Barack Obama continued Monday to urge Republicans in Congress to extend an employee payroll tax cut, hours after two Long Island Democrats visited a local manufacturer in support of the effort.

The appearances came as compromise attempts continued. Senate Democrats proposed dropping Obama's plan to also cut employers' share of the Social Security payroll tax to ensure an estimated 160 million employees don't see contributions increase.

Employees' payroll tax cut expires Dec. 31. With no action, the contribution rate returns to 6.2 percent, from 4.2 percent, costing the average family $1,000, the White House said.

Democrats seek to reduce the contribution to 3.1 percent.

Obama said his message to Congress is: "Keep your word to the American people and don't raise taxes on them right now."

Some House Republicans worry about the $120 billion cost of extending the tax cut, and resisted Democrats' efforts to pay for it by instituting a 3.25-percent surcharge on any income exceeding $1 million.

Brendan Buck, a spokesman for House Speaker John Boehner (R-Ohio), said there was widespread support for extending the tax cuts but, "if the president wants to make progress he should insist that Senate Democrats remove the job-killing small business tax hike from their partisan proposal."

Rep. Steve Israel (D-Dix Hills), speaking at Hauppauge military parts supplier GSE Dynamics, called it "the moment of truth for the middle class. If we do not act, those Americans, at a time when our economic recovery is hanging in the balance, will have $1,000 less: $1,000 less to spend on Christmas or Hanukkah gifts; $1,000 less to spend on milk, bread."

Rep. Tim Bishop (D-Southampton), also visiting the supplier, said he's hopeful a compromise is reached, even if it's "in the final hours of Dec. 31."

Extending the tax cut could have a positive ripple on the local economy, GSE owner Anne Shybunko said, but only if the beneficiaries put the savings back into small business. "If it's used effectively, it'll really work," said Shybunko, who oversees 48 employees. "But everyone has to do the right thing." With AP