Obama wants to extend Bush tax cuts, unemployment

President Barack Obama last night unveiled a tentative compromise deal to extend all Bush-era tax cuts for two years and continue unemployment benefits for 13 months, making big concessions likely to embolden Republicans.

“There are things in here that I don’t like, namely the extension of the tax cuts for the wealthiest Americans,” Obama said. But the measure “will stop middle-class taxes from going up. It will spur our private sector to create millions of new jobs, and add momentum that our economy badly needs.”

The plan upset some liberal Democrats, including New York’s Anthony Weiner who thinks Obama caved to Republican demands without getting enough in return.

“Middle-class Americans need someone to fight for them. They see this deal as punting on third down — it seems the president is not seeing the value of being on offense," Weiner said.

Most Democrats wanted to extend the lower tax rates for individual income up to $200,000 only, while Republicans pushed for additional tax cuts for the wealthiest. If a deal wasn’t reached, taxes would increase across the board Jan. 1, which Obama said would have raised taxes by about $3,000 for a typical family.

Senate Republican Leader Mitch McConnell said: “I appreciate the determined efforts of the President and Vice President in working with Republicans on a bipartisan plan to prevent a tax hike on any American.”

House Democrats are slated to discuss the compromise today. Vice President Joe Biden is expected to visit Senate Democrats in an effort to sway them and wrap up the deal before the holiday break.

(With Reuters)

Other key provisions in the proposal include:
* Giving a one-year, 2 percent break on Social Security payroll taxes
* Extending the Earned Income Tax Credit for working families, a child tax credit and college tax credit
* Setting estate tax at 35% with a $5 million exemption level