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Obama Makes Pitch to Blue-Collar Voter in Bid to Extend Tax Cut

Wednesday, 30 Nov 2011 06:55 AM

 

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Nov. 30 (Bloomberg) -- President Barack Obama is heading to Scranton, Pennsylvania, for the first time since taking office to press Congress on extending a payroll tax cut for workers and shore up support from a key electoral constituency.

The official focus of the president’s visit to the former manufacturing hub in northeastern Pennsylvania today is rallying support for keeping the tax cut intact past its Dec. 31 expiration. The stop also puts Obama in front of largely blue- collar voters in a longtime Democratic congressional district that flipped to a Republican in the 2010 election.

“People have looked to Scranton to see what middle-class, blue-collar America is thinking,” said Jean Harris, head of the Political Science Department at the University of Scranton. “And if he can get here early and get people talking about him in a positive way, they’re probably hoping it’s going to snowball.”

Since officially kicking off his re-election campaign in April, Obama has focused on battleground states that he won in 2008 and needs to hold to get re-elected. Among them is Pennsylvania, which Obama has visited 16 times since he took office, including six over the last seven months. Vice President Joe Biden, who grew up in Scranton, also has visited the area.

The president will speak at Scranton High School before going to New York for three fundraisers later today which are aimed at raising at least $2.4 million for Obama’s re-election effort.

Democratic Advantage

Pennsylvania should be friendly territory for Obama. There are about four registered Democrats for every three Republicans in Pennsylvania and Democrats outnumber Republicans 2-1 in Lackawanna County, of which Scranton is the hub, according to the Pennsylvania Department of State.

In the last five elections, Pennsylvania voters have supported the Democratic nominee for president, including giving Obama 54.5 percent of the vote in 2008.

Since then, Republicans have taken Pennsylvania’s governorship, a U.S. Senate seat and five U.S. House seats from Democrats.

One of those House seats went to Republican Representative Lou Barletta, who defeated 13-term incumbent Democrat Paul Kanjorski in 2010 and now represents Scranton. Barletta said he doesn’t think Obama can take the area for granted.

“In 2008, the president won here in northeastern Pennsylvania by 15 points, however I won by 10 points in 2010 so you can draw your own conclusion as to how the president’s doing here in northeastern Pennsylvania,” he said in an interview.

Challenge to Obama

Rick Schraeder, president of the local electrical workers union, said he voted for Obama in 2008 and will again in 2012. Still, he said “any one of” the Republican candidates seeking their party’s nomination could pose a challenge to Obama.

“We can’t take anything for granted, we’re going to have to work hard to get the people in there that are going to support the middle class,” he said.

That’s the central message of Obama’s pitch for extending and expanding the temporary cut in the Social Security payroll tax that was the biggest item in his $447 billion jobs proposal, which has been blocked by Republicans in Congress.

Without action by Congress, the payroll tax for workers would return to 6.2 percent from the temporary 4.2 percent rate. Obama also wants lawmakers to temporarily reduce the tax to 3.1 percent and cut in half the employer portion of the tax for the first $5 million in wages that they pay. He would eliminate the tax entirely for newly hired workers.

Tax Debate

“If Congress refuses to act, then middle-class families are going to get hit with a tax increase at the worst possible time,” Obama said Nov. 22 in Manchester, New Hampshire. “For the average family, your taxes will go up $1,000 if Congress does not act by the end of the month.”

Barletta said that while he would consider voting to extend the payroll tax, “the president would be better served to stay in Washington and talk to members of Congress about the plan.”

Pennsylvania’s unemployment rate was 8.1 percent in October, below the national average of 9 percent that month. The metropolitan area that includes Scranton had an 8.8 percent unemployment rate in September, according to Labor Department data compiled by Bloomberg.

Pennsylvania’s economic health improved 1.9 percent during the year ended June 30, 15th-best among 50 states and Washington, D.C., according to the Bloomberg Economic Evaluation of States Index, which uses data on real estate, jobs, taxes and stock prices to gauge growth.

Scranton Shrinking

Once the hub of the steel industry, Scranton’s population has been falling for decades and today is about 76,000, census data show. The number of manufacturing jobs in the region in 2010 was 28,000, down from 43,000 in 2001.

Schraeder is urging his union’s approximately 500 members to “wake up” and vote for the president in 2012.

“A lot of our workers realize now that we’re down to it, it’s not a special interest item anymore, it’s not a gun, it’s not an abortion, it’s not a gay thing,” said Schraeder, 61. “They finally are getting that look it, we need to put food on our tables, we need a livable wage.”

From Scranton Obama flies to New York, where his first fundraiser tonight will be at the home of American Jewish Congress chairman and member of the executive committee of the American Israel Public Affairs Committee, Jack Rosen. About 30 people are expected to attend and ticket prices start at $10,000 each, according to a Democratic Party official. Rosen is also the chairman of the American Council for World Jewry, a Jewish advocacy group.

Holiday Party

The president will end the day at a dinner with approximately 45 people who paid $35,800 per person and a holiday-themed party at the Sheraton Hotel with approximately 500 people who paid $1,000 each.

Today, the Treasury Department released a report that makes the case for extending and expanding the payroll tax cut by showing the economic impact on each state.

In Pennsylvania, the report found that 6.7 million people are benefiting from the current payroll tax cut, which has increased after-tax income by $4.7 billion there. Under Obama’s plan to broaden the tax cut, 6.8 million people in Pennsylvania would get an after-tax increase in their income of $7.8 billion in 2012.

The current payroll tax cut amounts to $109 billion in tax relief for 159 million workers nationally, according to the report. Expanding it in 2012 would put $179 billion in workers’ pockets, or $1,550 for the typical family. The administration argues that would help spur economic growth and create jobs.

--With assistance from Richard Rubin in Washington. Editors: Joe Sobczyk, Robin Meszoly.

To contact the reporter on this story: Kate Andersen Brower in Scranton, Pennsylvania at Kandersen7@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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