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Obama cuts deal with GOP on taxes

Brushing past Democratic opposition, President Barack Obama announced agreement with Republicans Monday night to extend expiring tax cuts for all Americans, renew jobless benefits and grant a one-year reduction in Social Security taxes for millions.

The emerging agreement also includes tax breaks for businesses that the president said would contribute to the economy’s recovery from the worst recession in eight decades.

Obama said there were elements of the deal he personally opposed, including an extension of expiring income tax cuts at upper income levels and a more generous deal on estates. But he said he decided that an agreement with Republicans was more important that a stalemate that would have resulted in higher income taxes at all income levels on Jan. 1.

“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,” he said at the White House.

Senate Majority Leader Harry Reid, D-Nev., reacted curtly to the president’s announcement.

“Now that the president has outlined his proposal, Senator Reid plans on discussing it with his caucus tomorrow,” his spokesman, Jim Manley, said in a written statement.

One top Republican, Rep. Dave Camp of Michigan, was more positive. “This framework will allow us to extend all current tax rates and give economic recovery and job creation a chance,” he said.

Democrats have repeatedly raised objections to including the upper-income in any plan to extend tax cuts enacted in 2001 and 2003 when George W. Bush was president. The Democratic-controlled House recently passed legislation to let the cuts lapse on incomes over $200,000 for individuals and $250,000 for couples. On Saturday, Republicans blocked an attempt by Senate Democrats to do the same.

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