Vice President Joe Biden told reporters traveling with him in Japan that a cut in the payroll tax paid by employers is "one of things that's being considered" as part the package Obama plans to introduce after Labor Day. Biden said he had "extensive discussions" with Obama about the plan before he left, without giving details.
Talks With Republicans
Biden added that he already had discussed the idea of such a tax cut with Republican lawmakers during debt-limit negotiations over the summer. The tax funds the Social Security and Medicare programs and is split equally between employers and workers. The employee portion of the Social Security levy was cut to 4.2 percent from 6.2 percent as part of tax legislation passed last year.
Amid signs of sluggish growth, the unemployment rate was 9.1 percent in July and economists have raised their forecasts for unemployment next year.
The median forecast for unemployment during the fourth quarter of 2012 -- when Obama is up for re-election -- was 8.5 percent in a Bloomberg News survey of economists taken Aug. 2 through 12. That was up from a median forecast of 8.0 percent for the election-day quarter in a survey of the same economists taken a month earlier.
Obama is seeking to revive a version of the so-called grand bargain with congressional Republicans that would combine long- term U.S. deficit reduction through entitlement benefit cuts and tax increases with immediate steps to boost job growth. To offset the cost of the new initiatives, Obama will seek additional long-term deficit reduction.
Obama has cited Buffett to counter critics of his policy proposals, particularly on raising taxes for the nation's wealthiest individuals and families.
During his bus tour last week through rural areas of Minnesota, Iowa and Illinois, Obama quoted from a New York Times opinion article in which Buffett wrote that the nation's richest individuals have been "coddled long enough by a billionaire- friendly Congress." Buffett argued for raising taxes for the "mega-rich" in the U.S.