Obama announces Bush-era tax cuts deal

Obama announced a compromise deal on Monday to extend all Bush-era tax cuts for two years, giving ground to emboldened Republicans who won big in last month's congressional elections.

Obama announces Bush-era tax cuts deal

President Barack Obama announced a compromise deal on Monday to extend all Bush-era tax cuts for two years, giving ground to emboldened Republicans who won big in last month's congressional elections.

After meeting Democratic leaders at the White House, Obama announced a "framework" agreement with Republicans that would renew tax cuts not just for the middle class -- as he and fellow Democrats had sought -- but also for wealthier Americans, as Republicans wanted.

The tentative tax-cut deal, which is expected to extend breaks on dividends and capital gains as well, also calls for a 2 percent employee payroll tax cut and a 13-month extension of unemployment benefits, which could placate some Democrats.

But Obama acceded to Republican demands on the federal estate tax, by agreeing to a maximum 35 percent tax with a $5 million individual exemption level, which he admitted was more generous than he felt was "wise or warranted."

"We cannot play politics at a time when the American people are looking for us to solve problems," Obama told reporters. "I am confident ultimately that Congress is going to do the right thing."

Obama said he had made some concessions because of the urgent need to reach a deal before Congress adjourns this month to avoid allowing the middle class to face higher taxes when all of the Bush-era cuts expire on Dec. 31.

"I have no doubt that everyone will find something in this compromise that they don't like," Obama said. " In fact, there are things in here that I don't like -- namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years."

Extending all the tax cuts for two years would cost $501 billion, according to the congressional budget office, at a time when Obama is under pressure to cut the $1.3 trillion budget deficit.

Jim Manley, spokesman for Senate Majority Leader Harry Reid, said Reid would discuss Obama's plan with the Democratic caucus on Tuesday.

The deal outlined by Obama includes a two-year extension of a package of tax breaks for individuals and business.

There was no immediate word on whether "Build America Bonds" -- taxable debt included in last year's stimulus plan and due to expire at the end of December -- would be included in a final tax-cut deal. An administration official said the details were still being worked out.


Agencies

Last Mod: 07 Aralık 2010, 17:49
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