San Francisco (Obama.net)- After months of going back and forth on how the tax cuts instituted by former President George W. Bush should be extended, Republicans and Democrats finally agreed to terms on a new plan that would extend the tax cuts as they are for two years. In addition, unemployment benefits have been extended for 13 months. The tax breaks for students and families as stated in the 2009 Stimulus Package are also going to be extended. Other messages agreed on have to do with estate taxes and a reduction in payroll taxes by two percent, leaving them at 4.2%.
Many Democrats were not pleased with President Obama’s decision to agree to terms with Republicans when it comes to extending the cuts to those making over $250,000 per year.
Obama stood by his choice saying that his “number one priority is to do what’s right for the American people,” and that “because of this agreement, middle class Americans won’t see their taxes go up on January 1st.”
Obama also made it clear that he will spend the next two years working to make sure that when the expiration date comes up again, the current tax cut system that is costing the nation financially will be changed.
President Obama said that because of his willing to extend tax cuts for the wealthy, nearly 2 million Americans will be able to keep receiving unemployment benefits and feed their families for the next year and a month as the job market and economy continues to bounce back. Also, those 2 million Americans will be able to maintain their homes and not be rendered homeless because of the unemployment benefits extension.
Obama told reporters that he is upset with Republicans’ holding onto their old beliefs that are costing average Americans. The President said that the “middle class tax cuts were being held hostage to the high-end tax cuts” and that he was not going to let the middle class get hurt just to stand against an old belief.
President Obama said that his job was to persuade the Republicans in the United States Senate, but that he has “not been able to budge them.” He said, “If this was just a matter of my politics or being able to persuade the American people to my side, then I would just stick to my guns.”
Because of the tax breaks being extended to the wealthiest Americans, expert estimate that the United States Treasury will lose as much as $800 billion through 2012.
Obama did say that come 2012 and the new Presidential campaign, the tax cuts for the middle class will be one of his chief concerns that he will not bend on.
Republicans were pleased with the deal. Despite having to agree to allow Democrats to spend more unemployment benefits and reducing the payroll taxes, Republicans got the only thing they were truly going for.
At the cost of the American economy, the Republicans were successful with their political games this time around.