WASHINGTON -- The White House refused to say yesterday whether President Barack Obama would agree to payroll tax cuts if they add to the nation's deficit, as the top Senate Republican predicted lawmakers eventually would reach an agreement to prevent taxes from increasing on 160 million Americans.
The tax cut is to expire at the end of the year, raising taxes by about $1,000 on the average household unless Congress and Obama act. As the deadline approaches, political support is building for at least continuing the tax cut, and thereby heading off a politically bruising tax hike. The holdup is on how to offset the cost.
Obama spokesman Jay Carney said the president prefers that lawmakers find a way to pay for the cuts that does not add to the federal debt. Indeed, Obama has made that promise over and over.
But Carney pointedly avoided questions from reporters about what Obama would do should Congress pass the extension without figuring out how to cover the cost.
The White House is being pressed on whether Obama is showing maneuvering room in his stand as he seeks to give a jolt to the economy, or at least to prevent another setback.
"We don't know what the end game is yet," Carney said. "There is no value in this process -- or ultimately to the American people, who want and deserve this tax cut -- to negotiate an end game here before we even have a vote."
Obama included the extension and expansion of the payroll tax cuts in the jobs bill he released in September. In pressuring Republicans to get behind that bill, he has been emphatic that every single provision, including extension of the payroll tax cut, will be offset somewhere else so the huge federal debt will not worsen.
When he unveiled his plan, he put it plainly: "The American Jobs Act will not add to the deficit. It will be paid for." Senate Democrats are to hold a test vote on a plan later this week that would pay for Obama's proposed extension and expansion of the payroll tax cut with a 3.25 percent tax surcharge on the very wealthy.
But Senate Minority Leader Mitch McConnell insisted yesterday that the Republicans would not back an increase in taxes on the wealthy to pay for the extension. But he did say the GOP would propose extending last year's reduction and paying for the measure, though he did not say how.