US & Canada

Obama pushes payroll tax cut extension in New Hampshire

US President Barack Obama (R) at airport in Manchester, New Hampshire, on 22 November 2011
Image caption The president argued that failure to extend the tax breaks would hurt middle-class families

US President Barack Obama has visited the key primary state of New Hampshire to challenge Congress to extend an expiring payroll tax cut.

He made the trip one day after the failure of a deficit-cutting effort by a bipartisan congressional committee.

The president offered Congress a "second chance" to renew the economic stimulus via a separate vote next week.

He challenged Republicans - who generally oppose tax rises - to back the plan or see taxes rise in 2012.

The effect of a Republican vote against the proposal would be to increase the tax burden on ordinary Americans, he said.

"If they vote no again the typical family's taxes will go up $1,000 next year," Mr Obama told the crowd at a high school in Manchester, New Hampshire.

Democrats had hoped to fold the tax cut extension and other economy-boosting measures into an agreement by the so-called "super-committee".

The measure helped 121 million families save $934 (£600) last year, the Tax Policy Center says.

Republicans are not wholly against the proposal, but may attach conditions and demand the cost is offset elsewhere.

'No holiday taxes'

It has been nearly two years since Mr Obama visited New Hampshire, a presidential swing state he won in 2008.

In January, the state holds one of the first state nominating contests to pick the Republican candidate to challenge Mr Obama for the White House in 2012.

Former Massachusetts Governor Mitt Romney - the current Republican front-runner - has started running campaign advertisements in the state, attacking Mr Obama.

But Mr Obama defended his record in his Manchester speech.

"Don't be a Grinch. Don't vote to raise taxes on working Americans during the holidays," he said.

"The next time you hear one of these folks from the other side... talking about raising your taxes, you just remind them that ever since I've got into office, I've lowered your taxes, haven't raised them," he added.

At one point hecklers supporting Occupy Wall Street interrupted Mr Obama's speech.

They chanted: "Mr President - over 4,000 protesters, over 4,000 protesters, have been arrested."

Mr Obama told the group he understood their grievances: "There is a profound sense of frustration about the fact that the essence of the American dream is slipping away and that's not how things are supposed to be," he said.

After the speech they also handed the president a note saying that while demonstrators had been arrested, "banksters" were destroying the economy "with impunity".

Avoiding the cuts

During Tuesday's visit Mr Obama also urged an extension of benefits for the long-term unemployed.

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Media captionPresident Obama told a crowd in New Hampshire that Congress must 'work hard and meet its responsibilities'

Introduced as part of the 2008 stimulus package, it was renewed last year but is also due to expire at the end of this year unless Congress acts.

Analysts say that failing to preserve the measures would be a drag on the fragile US economy, already labouring under an unemployment rate of 9%.

Official figures released on Tuesday found the US economy had grown in the last quarter at a slower pace than previously estimated.

The figures came as the super-committee failed after weeks of talks to agree how to cut government spending.

It means automatic across-the-board spending cuts are due to come into effect in 2013.

However, some Republican lawmakers have already said they will work to avoid the cuts to the Pentagon's budget.

Representative Buck McKeon, chairman of the House Armed Forces Committee, and Senator John McCain, top Republican on the Senate Armed Services Committee, want to eliminate reductions to military spending.

And President Obama's own Defence Secretary, Leon Panetta, is lobbying to protect his department from cost-cutting.

The president warned on Monday that he would veto any move to undo the automatic cuts.

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