NEW: Republican Sen. Sessions says President Obama is campaigning, not leading
Obama calls for shared national investment in growth and opportunity
He speaks where Teddy Roosevelt delivered his 1910 "New Nationalism" address
Democrats and Republicans are divided over how to pay for the payroll tax measure
More than a century after Teddy Roosevelt’s famous “New Nationalism” address, President Barack Obama sounded similar themes Tuesday in the same town in the Republican heartland of Kansas, delivering a populist speech that called for extending the payroll tax cut set to expire at the end of the year.
Obama described stark differences between a Republican ideology he described as leaving people to fend for themselves and his vision of government helping provide equal opportunity for all Americans regardless of where they begin in life.
“It’s not a view that we should somehow turn back technology or put up walls around America,” Obama said in the 55-minute speech, which frequently prompted applause. “It’s not a view that says we should punish profit or success or pretend that government knows how to fix all society’s problems.
“It’s a view that says in America, we are greater together – when everyone engages in fair play, everyone gets a fair shot, everyone does their fair share.”
The Roosevelt speech in 1910 was intended to unite a Republican Party divided by a reform movement seeking curbs on industrial might.
Obama also seeks Republican unity, but this time the goal is to push through economic stimulus proposals and seek a political advantage for his Democratic Party.
He called for Congress to “immediately” extend the payroll tax cut, saying: “If we don’t do that, 160 million Americans, including most of the people here, will see their taxes go up by an average of $1,000 starting in January, and it would badly weaken our recovery.”
He framed the issue as a choice between making vital investments in future growth or the Republican position he characterized as maintaining “tax breaks for the wealthiest Americans in our country.”
“We can’t afford to do both,” Obama said. “That is not politics. That’s just math.”
In an initial Republican response, conservative Sen. Jeff Sessions of Alabama called Obama’s speech “a virtual declaration that, for the remainder of his term, his focus will be on campaigning rather than governing.”
At issue is the tax on workers that helps fund the Social Security Trust Fund. As part of a budget-cutting deal last December, Obama and Congress negotiated a reduction of 2 percentage points in the payroll tax rate – from 6.2% to 4.2%.
The cut meant a family of $50,000 paid about $1,000 less in payroll taxes. With the reduced rate expiring on January 1, Obama and Democrats seek to expand the provision by lowering the rate even further – to 3.1% – for another year.
Republicans initially opposed the idea, saying the provision failed to create jobs last year. Now Republican leaders say they support an extension, but they differ with Obama and Democrats on how to pay for it.
The Democratic plan calls for a surtax on income over $1 million, as well as other provisions to cover the $180 billion cost. Republicans oppose any tax increase as part of their push to shrink the size of government.
Obama took aim at that position Tuesday, saying congressional Republicans “want to go back to the same policies that have stacked the deck against middle-class Americans for too many years.”
“Their philosophy is simple: We are better off when everyone is left to fend for themselves and play by their own rules,” Obama said in a speech pushing for passage of provisions of his jobs package. “Well, I’m here to say they are wrong.”
Sounding a theme from Roosevelt’s speech more than a century earlier, Obama said: “I’m here to reaffirm my deep conviction that we are greater together than we are on our own.”
In his speech in Osawatomie, Kansas, back in 1910, Roosevelt made a similar appeal.
“We grudge no man a fortune in civil life if it is honorably obtained and well-used,” Roosevelt said, but added: “We should permit it to be gained only so long as the gaining represents benefit to the community.”
Describing what he called a “new nationalism,” Roosevelt said it “regards the executive power as the steward of public welfare.”
“It demands of the judiciary that it shall be interested primarily in human welfare rather than in property, just as it demands that the representative body shall represent all the people rather than any one class or section of the people,” Roosevelt said.
On Tuesday, Obama called restoring opportunity for America’s middle class “the defining issue of our time.”
“This is a make-or-break moment for the middle class, and all those who are fighting to get into the middle class,” the president said. “At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, and secure their retirement.”
Economic inequality in America today is at “a level we haven’t seen since the Great Depression” and “hurts us all,” Obama said.
“Inequality also distorts our democracy,” he added to applause. “It gives an outsized voice to the few who can afford high-priced lobbyists and unlimited campaign contributions, and runs the risk of selling out our democracy to the highest bidder. And it leaves everyone else rightly suspicious that the system in Washington is rigged against them – that our elected representatives aren’t looking out for the interests of most Americans.”
In particular, Obama cited tax disparity, saying tax shelters and loopholes allow a quarter of all millionaires to pay lower tax rates than millions of middle-class families, adding that “some billionaires have a tax rate as low as 1%.”
“This is the height of unfairness,” Obama said. “It’s wrong that in the United States of America, a teacher or a nurse or a construction worker (who) maybe earns $50,000 should pay a higher tax rate than somebody raking in $50 million.”
He said the issue “isn’t about class warfare,” a charge leveled by Republican opponents.
“This is about the nation’s welfare,” he said. “It’s about making choices that benefit not just the people who’ve done fantastically well over the last few decades, but that benefits the middle class, and those fighting to get into the middle class, and the economy as a whole.”
Sessions, however, took issue with Obama depicting himself as a champion of the middle class.
“The middle class must pay for the president’s failed policies twice—first, they have to pay the bill for profligate federal spending, and then they must pay the price for its economic consequences in the form of lost jobs and mounting debt,” Sessions said in a statement. “The middle class bears the brunt of the president’s misguided big-government vision.”
On another issue, Obama said he would veto any effort by congressional Republicans to “delay, defund or dismantle” a new consumer protection panel by blocking the confirmation of the nominated director, Richard Cordray.
“The Republicans in the Senate refuse to let him do his job,” Obama said of Cordray, a former Ohio attorney general. “Why? Does anyone here think the problem that led to our financial crisis was too much oversight of mortgage lenders or debt collectors? Of course not.”
Senate Republican leader Mitch McConnell, R-Kentucky, said Tuesday that Republicans will prevent a vote on Cordray’s nomination until changes are made to strengthen congressional oversight of the new panel.
Obama, however, said that “consumers deserve to have someone whose job it is to look out for them.” To applause, he said, “I intend to make sure they do,” adding that “I will veto any effort to delay, defund, or dismantle any of the new rules we put in place.”
On the payroll tax impasse, moderate Republican Sen. Susan Collins of Maine, who cast the lone GOP vote in favor of an earlier Democratic plan that included the so-called “millionaires tax,” proposed a compromise Tuesday that would exclude small businesses from the provision.
A revised Democratic proposal unveiled Monday by Sen. Bob Casey, D-Pennsylvania, contains a reduced version of the millionaires tax, down to 1.9% from the original 3.25%, and calls for it to expire after 10 years, according to a statement by the senator.
In addition to revenue from this “millionaire’s surtax,” the new proposal would be paid for by increasing fees that Fannie Mae and Freddie Mac charge mortgage lenders to guarantee repayment of new mortgage loans, Casey’s statement said.
The provision was discussed during negotiations by the congressional “super committee” that failed to reach a deficit reduction deal last month, and would raise $38.1 billion, according to Casey’s statement.
A softening of Republican opposition to extending the lower payroll tax rate has raised expectations for eventual congressional approval of a compromise plan.
House Speaker John Boehner, R-Ohio, last week agreed with Obama and Democrats that extending the payroll tax cut would help the economy by putting more money in the pockets of consumers.
Boehner’s comment broke from conservative GOP orthodoxy that contends the payroll tax cut enacted last year had failed to benefit the sluggish economic recovery.
House Republican leaders have assembled their own proposal to extend the payroll tax cut in conjunction with other steps.
Boehner has insisted that any extensions of tax cuts or other programs be paid for through adjustments elsewhere, and he outlined a list of spending cuts over 10 years to offset the impact on the deficit, according to House Republican aides.
However, a group of fiscally conservative Republicans opposed the GOP leaders’ plan because the offsetting spending cuts would take a decade to complete.
CNN’s Kate Bolduan, Ted Barrett, Deirdre Walsh and Emily Schultze contributed to this report