President Obama on Monday urged Republicans on Capitol Hill to join Democrats and pass the payroll tax cut extension for workers before it expires on Dec. 31.
Failure to reach a deal will increase taxes on average American workers by about $1,000, Obama said, something Republicans have sworn they would never do.
"Keep your word to the American people," the president added, "and don't raise taxes on them right now."
Failure to pass the extension will "take money from Americans just as they need it," just when the economy is trying to get some traction," Obama said.
Speaking in the Brady Briefing Room, Obama said independent economists -- including some he said worked for Republicans in the past -- said not extending those cuts will hurt the American economy.
He also urged that unemployment insurance benefits be extended. "We cannot play games with unemployment insurance when we still have an unemployment rate that is still too high," he said.
"With millions of Americans still looking for work, it would be a terrible mistake for Congress to go home for the holidays without extending unemployment insurance," Obama said.
Republicans and Democrats in Congress have clashed over how to extend the tax break even as they largely agree that it should be done. Last week plans by both Senate Republicans and Democrats were defeated.
Congress is racing to find a compromise to extend the tax break for workers, which expires at the end of this year. Obama said around 160 million workers would be affected. There are critical disagreements on how to pay for the package, which could also continue emergency unemployment benefits and ensure that doctors who treat Medicare patients don't take a 27 percent pay cut.