Obama unveils tax compromise
US: US President Barack Obama, bowing to his Republican foes in their
first major battle since November elections, unveiled a compromise
Monday to avert a huge New Year’s tax hike on the US middle-class.
“It would be a grave injustice to let taxes increase for these
Americans right now. And it would deal a serious blow to our economic
recovery,” he said in brief televised remarks on what he called a
“framework” for a final deal.
The arrangement, which still faces an uphill battle in the US
Congress, would extend massive tax cuts passed in 2001 and 2003 beyond
their scheduled expiration on January 1, and would extend jobless
benefits for 13 months.
Obama acknowledged that the compromise, which saw him drop his once
fierce opposition to extending the tax cuts that directly benefit only
the richest two percent of US earners, risked leaving many of his
Democratic allies cold.
“I have no doubt that everyone will find something in this compromise
that they don’t like. In fact, there are things in here that I don’t
like,” said Obama, who will now face a war over taxes during his 2012
reelection bid.
But with Republicans able to block legislation that only extended tax
cuts for the middle class, and insisting on prolonging those for the
wealthiest, and threatening to derail an ambitious year-end agenda that
includes a landmark nuclear arms control treaty with Russia, Obama had
few choices.
“Sympathetic as I am for those who prefer a fight over compromise, as
much as the political wisdom may dictate fighting over solving problems,
it would be the wrong thing to do,” said the US president.
In a chilly first reaction from a key ally, Senate Majority Leader
Harry Reid kept mum on the merits of Obama’s compromise and said only
that he would take up the plan in a closed-door meeting with fellow
Democrats on Tuesday.
“Now that the president has outlined his proposal, Senator Reid plans
on discussing it with his caucus tomorrow,” Reid spokesman Jim Manley
said in a terse statement.
Republican Senate Minority Leader Mitch McConnell said the compromise
showed broad agreement in Washington on the need for “a new direction”
in the wake of November 2 elections that saw voters rout Obama’s
Democrats.
“Members of the Senate and House will review this bipartisan
agreement, but I am optimistic that Democrats in Congress will show the
same openness to preventing tax hikes the administration has already
shown,” said McConnell.
Republicans, who in January will formally retake control of the House
of Representatives and see their Senate numbers swell, had called for
weeks for extending all of the tax cuts approved under Obama predecessor
George W. Bush.
Democrats including Obama had pushed for extending only tax cuts on
the first 200,000 dollars of income for individuals and 250,000 for
couples but failed in the face of lockstep Republican opposition.
Washington, Tuesday, AFP
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