Obama: $1,000 tax hike if Congress won't act

President Barack Obama speaks about jobs, Tuesday, Nov. 22, 2011, at Manchester High School Central in Manchester, N.H. AP

MANCHESTER, New Hampshire - President Barack Obama, visiting the key battleground state of New Hampshire on Tuesday, targeted Republicans in Congress and those seeking to deny him a second term with a push to extend payroll tax cuts.

During a speech at a Manchester high school, the president argued that a failure to extend the tax breaks would hurt middle-class families already struggling amid a shaky economy, effectively daring congressional Republicans to block the extension and increase taxes.

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

But if Republicans are in Obama's sights, he's firmly in theirs, too.

Presidential hopeful Mitt Romney is 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."

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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. With Republican candidates blanketing the state with an anti-Obama message ahead of the Jan. 10 primary, the president and his surrogates, including Vice President Joe Biden, are seeking to steal some of the spotlight for their economic message.

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 Romney, who governed the neighboring state of Massachusetts.

Romney's print ads, in the form of an open letter, say the evidence on Obama's economic stewardship is "unequivocal" -- his policies have "fallen short even by the standards your own administration set for itself."

"Far from bringing the crisis to an end, (they) have actively hindered economic recovery," the ad says.

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