Obama, GOP Reach Tentative Deal On Tax Cuts In exchange for extending Bush-era tax cuts for the wealthy, the president won Republican backing for additional jobless benefits, as well as other tax breaks directed at the middle class. But Obama, who has to sell the deal to Democrats, acknowledged that no one will be entirely happy with the compromise.
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Obama, GOP Reach Tentative Deal On Tax Cuts

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Obama, GOP Reach Tentative Deal On Tax Cuts

Obama, GOP Reach Tentative Deal On Tax Cuts

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STEVE INSKEEP, Host:

NPR's Scott Horsley begins our coverage.

SCOTT HORSLEY: But the president reluctantly went along with a temporary two-year extension, once Senate Republicans made it clear, over the weekend, that unless the rich got their tax break, no one else would either.

INSKEEP: Make no mistake, allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family. And that could cost our economy well over a million jobs.

HORSLEY: But with all tax cuts due to expire at month's end, and a more Republican Congress about to be sworn in, Mr. Obama is unwilling to take that chance.

INSKEEP: The American people didn't send us here to wage symbolic battles or win symbolic victories. They would much rather have the comfort of knowing that when they open their first paycheck on January of 2011, it won't be smaller than it was before.

HORSLEY: Senate Republican leader Mitch McConnell said, in a statement last night, he appreciates the president's determined efforts. And he adds, he's optimistic congressional Democrats will be equally open to compromise.

INSKEEP: 35 percent on estates worth more than $5 million. In exchange, President Obama won GOP backing for another 13 months of jobless benefits for the long-term unemployed, as well as a two-year extension of additional tax breaks aimed at working and middle-class families.

INSKEEP: If Republicans truly believe we shouldn't raise taxes on anyone while our economy is still recovering from the recession, then surely we shouldn't cut taxes for wealthy people while letting them rise on parents and students and small businesses.

HORSLEY: The framework agreement does not include the president's signature Making Work Pay tax cut, a part of the stimulus package that provided up to $800 a year for working families. Instead, he's calling for a one-year cut in the portion of payroll taxes that workers contribute to Social Security.

INSKEEP: $120 billion next year.

INSKEEP: It's the right thing to do for jobs. It's the right thing to do for the middle class. It is the right thing to do for business. And it's the right thing to do for our economy.

HORSLEY: The deal also give Congress a two-year window to consider more fundamental changes in the tax code, as recommended by several deficit watchdog committees in recent days. The president is clearly banking on a change in the political winds during that period.

INSKEEP: As I engage in a conversation with the American people about the hard choices we're going to have to make to secure our future and our children's future and our grandchildren's future, it will become apparent that we cannot afford to extend those tax cuts any longer.

HORSLEY: Scott Horsley, NPR News, the White House.

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