President Barack Obama said the compromise deal he reached with Republicans to extend tax cuts was necessary to meet his top priorities of helping middle-income Americans and spurring job creation.
“Because of this agreement, middle-class Americans won’t see their taxes go up on Jan. 1,” Obama said yesterday at a White House news conference. “It’s a good deal for the American people.”
He said he will fight to end the tax cuts for the wealthiest taxpayers in two years, when the new extension will expire.
Obama is facing resistance from fellow Democrats in Congress because of the compromise, which he first announced Monday. It would give a two-year extension of current tax rates — including those for high-income taxpayers — in exchange for another 13 months of federal unemployment insurance for the long-term jobless and cutting the payroll tax by $120 billion for one year.
House Speaker Nancy Pelosi said the extension of the top tax rates would widen the deficit with little benefit to the economy. The addition of an estate tax provision adds “insult to injury.”
House Majority Leader Steny Hoyer said a continued tax break for the wealthiest Americans “is not warranted.” House Democrats haven’t decided whether they will support the compromise, he said.
Both stopped short of saying they would block the deal.
Obama said Republicans wouldn’t budge on the upper-income tax breaks, and he would have been unable to get a package that only kept the tax cuts for middle-income families through the Senate.
“A long political fight that carried over into next year might have been good politics but it would be a bad deal for the economy and it would be a bad deal for the American people,” he said.