Obama Rejects Republican Payroll Tax Proposal

The White House rejected Friday the latest proposal from Republicans in Congress on a payroll tax cut, saying its costs needed to be offset in a balanced away and not with budget cuts exempting the rich.

Republicans have proposed that the payroll tax cut be paid for with an extension of a pay freeze for federal workers, changes to civilian federal retiree benefits and other reforms, including gradual increases in Medicare health premiums for the elderly and a clampdown on assistance to illegal immigrants.

They have also sought to tie the payroll tax extension - a key component of President Barack Obama's $447 billion set of proposals to boost hiring - to the approval of TransCanada's Keystone XL pipeline, which would transport Canadian oil to Texas.

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