Payroll tax break: Keep it going, says Obama

President Barack Obama warned Tuesday a failure to extend a payroll tax break would hurt middle-class families, effectively daring congressional Republicans to increase taxes a year before the presidential election.

Speaking in the state that is home to the nation's first presidential primary, Obama sought to steal the spotlight from Republican presidential contenders who have blanketed the political battleground with anti-Obama messages.

"Don't be a Grinch. Don't vote to raise taxes on working Americans during the holidays," Obama said at a high school gymnasium.

Even as he sought to draw a bright line with Republicans over taxes, Obama was reminded about the unhappiness among some in the Occupy Wall Street movement. As he began to speak, Obama was briefly interrupted by protesters who chanted, "Mr. President — over 4,000 protesters, over 4,000 protesters, have been arrested."

Obama paused to let the demonstrators speak. "No, no, no. That's OK," Obama said. The crowd then sought to drown out the protesters with chants of "Obama!"

Working the crowd after the speech, Obama was handed a note from the protesters that amounted to a script of their chant. Captured in photographs, the note said peaceful demonstrators had been arrested while "banksters" destroy the economy "with impunity."

The note urges Obama to stop the assault on protesters' freedom of speech and says his "silence sends a message that police brutality is acceptable."

It's been nearly two years since Obama visited New Hampshire. And on Tuesday, he'll find a state that has shifted distinctly to the right since his 2008 victory. Recent polls indicate that, if an election between the two of them were held today, Obama would lose by roughly 10 percentage points to presidential hopeful Mitt Romney, who governed the neighboring state of Massachusetts.

Romney, meanwhile, was airing his first TV ads in the state, and they are sharply critical of Obama's economic record. He also ran ads in New Hampshire newspapers that say to Obama, "I will be blunt. Your policies have failed."

The president's trip to the state that holds the first presidential primary follows the collapse of the special congressional deficit-reduction supercommittee, which failed to reach a deal on $1.2 trillion in cuts. Democrats had hoped to tuck the payroll tax extension, as well as a renewal of jobless benefits for the unemployed, into a supercommittee agreement.

With that option seemingly off the table, the White House plans to push hard for a separate measure to extend the payroll tax cuts before they expire at the end of the year — and set up Republicans as the scapegoat if that doesn't happen.

The White House says a middle-class family making $50,000 a year would see its taxes rise by $1,000 if the payroll tax cuts are not extended.

Republicans aren't wholly opposed to the extension. In fact, party members sent the White House a letter in September stating that extension of the payroll tax cut is one element of Obama's $447 billion jobs bill where the two sides may be able to find common ground.

Some Republicans worry that the tax cut extension would undermine the solvency of Social Security pensions, and others are opposed to any effort to pay for the renewal by taxing the wealthiest Americans.

Obama wants to cut the payroll tax by another percentage point for workers, at a total cost of $179 billion, and cut the employer share of the tax in half as well for most companies, which carries a $69 billion price tag.

The issue could appeal to independent voters in low-tax New Hampshire, the presidential swing state Obama won in 2008. Ahead of the Jan. 10 Republican primary, Obama and his surrogates, including Vice President Joe Biden, are seeking to steal some of the spotlight for their economic message.

"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," Obama said. "That's worth reminding them."