Tax-cut deal reached
between Obama, Republicans
By Shailagh Murray
Washington Post Staff Writer
Monday,
December 6, 2010; 7:02 PM
President Obama and congressional Republicans agreed Monday to a tentative
deal that would extend for two years all the Bush-era income tax breaks set to
expire on Dec. 31, continue unemployment benefits for an additional 13 months
and cut payroll taxes for workers to encourage employers to start hiring.
The deal has been in the works for more than a week and represents a
concession by Obama to political reality: Democrats don't have the votes in
Congress to extend only the expiring income tax breaks that benefit the middle
class. The White House estimates that the proposed agreement would prevent
typical families from facing annual tax increases of about $3,000, starting Jan.
1.
Obama was able to extract an agreement from GOP leaders to support an
additional 13 months of jobless benefits, a 2 percent employee payroll tax cut
and extensions of several tax credits aimed at working families that were
included in the stimulus bill.
The deal also would revive the estate tax, but it would exempt inheritances
of up to $5 million for individuals and $10 million for couples. Democrats on
Capitol Hill are strongly opposed to setting the cap at that high a level and to
the 35 percent rate discussed by Obama and Republicans that would apply to the
taxable portion of estates.
In brief remarks Monday evening, Obama said he was disappointed that the deal
would extend breaks for the wealthiest households, but he warned Democrats not
to make good on threats to allow all the cuts to expire, as an expression of the
party's opposition to preserving the top-rate cuts. "Sympathetic as I am to
those who would prefer a fight to compromise … it would be the wrong thing to
do," the president said. "The American people didn't send us here to wage
symbolic battles."
The White House is preparing for significant opposition from Democrats and
will send Vice President Biden to meet with Senate Democrats on Tuesday. Later
on Tuesday, House Democrats are scheduled to discuss the proposed deal.
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Washington Post Company