President & Republicans Agree on Tax Cuts


After weeks of political wrangling, President Obama and Republican leaders have reached a deal over tax cuts, but Democrats in Congress aren't necessarily on board with the compromise.

President Obama announced a breakthrough: a deal with Republican leaders on tax cuts.

"It's not perfect, but this compromise is an essential step on the road to recovery," he said.

The key element is an extension of Bush-era tax cuts for everyone, even families making more than $250,000 a year.

In exchange, the president won a 13-month extension of unemployment benefits.

The estate tax would return at 35 percent for estates worth more than $5 million, and there is a one-year, two percent cut in payroll taxes.

Congress has been under a lot of pressure to get a tax bill passed by the end of the year. If they don't, almost every American would see their taxes go up January 1.

Senate minority leader Mitch McConnell said the deal reflects "a growing bipartisan belief that a new direction is needed if we are to revive the economy."

The president's next task is persuading democrats to sign on.

"I know there are some in my own party -- and the other party -- who would rather prolong this battle, even if we can't reach a compromise,” he said. “But I'm not willing to let working families across this country become collateral damage."

"Certainly none of us in the House have signed off on any kind of understanding like this,” said Rep. Chris Van Hollen, D-MD. “We're gonna have to look very carefully at the details."

To democrats who claim the president gave away too much, the White House says, he did what is best for America.

The deal on the tax bill also includes a variety of tax breaks for lower-income Americans, including a child tax credit and the earned-income tax credit.

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