TOPICS > Politics

Obama Signs Tax-Cut Compromise, Declares it ‘Good Deal’ for Americans

December 17, 2010 at 5:17 PM EST
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President Obama on Friday extended Bush-era tax cuts for two years by signing into law a compromise with Republican leaders. He acknowledged that there are some elements of the legislation he dislikes, but called it a "good deal" for the American people.
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TRANSCRIPT

JIM LEHRER: A midnight vote led to a mid-afternoon bill signing today, extending tax cuts and jobless benefits.

Ray Suarez has our story.

(APPLAUSE)

RAY SUAREZ: The signing ceremony climaxed a two-week push to preserve the Bush era income tax breaks for two years and keep jobless benefits going through next year.

U.S. PRESIDENT BARACK OBAMA: Not only will middle-class Americans avoid a tax increase, but tens of millions of Americans will start the new year off right by opening their first paycheck to see that it’s actually larger than the one they get right now. This is real money that is going to make a real difference in people’s lives.

RAY SUAREZ: The plan arrived on the president’s desk after a House debate that went late into the previous evening.

MAN: On this vote, the yeas are 277; the nays are 148. The motion is adopted.

RAY SUAREZ: Those 277 votes for the measure included 139 Democrats and 138 Republicans. But even with that strong bipartisan tally, more than 100 Democrats opposed the bill in a contentious debate on the floor.

MAN: There is such thing as a temporary tax cut.

RAY SUAREZ: They argued it was a giveaway to the wealthy.

And some, like Texas Congressman Lloyd Doggett, said it wouldn’t work, in any case.

REP. LLOYD DOGGETT (D-TX): This deal borrows from our future to throw tax money at problems, with the efficiency of most of its provisions that you would get if people stood and shoveled out cash at the front door of the Capitol.

RAY SUAREZ: Some of the 36 Republicans in the no column, like Mike Pence of Indiana, insisted the bill did not go far enough.

REP. MIKE PENCE (R-Ind.): We all know what we should be doing today is voting to extend all the tax cuts permanently. The reality is, is that uncertainty is the enemy of prosperity.

RAY SUAREZ: But party leaders on both sides warned delay could do serious harm to the economy.

REP. DAVE CAMP (R-Mich.): I know some of my friends want to wait until January, when Republicans are back in the majority, because they think that we can get a better deal. That is as misguided as it is politically callous.

REP. STENY HOYER (D-Md.), majority leader: I will vote for this bill, because I don’t want to see middle-income working people in America get a tax increase, because I think that will be a depressant on an economy that needs to be lifted up.

RAY SUAREZ: Many House Democrats, including Hoyer, were angered by an estate tax provision. It exempts estates up to $10 million in value, with a top tax rate of 35 percent above that. The Democratic alternative? A cap of $7 million in value, with a top tax rate of 45 percent.

House Speaker Nancy Pelosi said the more generous exemption in the bill would protect a select few, at the expense of middle-class families.

REP. NANCY PELOSI (D-Calif.), speaker of the House: The Republicans insisted that $23 billion in benefits go to the 6,600 wealthiest families in America — 6,600 families holding up tax cuts for 155 million Americans, is that fair? Does that meet any test of fairness that we have?

RAY SUAREZ: But Wisconsin Republican Paul Ryan said, that’s a wrongheaded view of fairness.

REP. PAUL RYAN (R-Wis.): I hear all this talk about the death tax, the estate tax; this is going to give a windfall to these people, all this money going to these privileged people who have built these businesses, made all this money.

It’s their money.

RAY SUAREZ: In the end, the estate tax amendment was voted down, 233-194, clearing the way to final passage.

For now at least, the tax cut issue is resolved. But the two-year extension guarantees the debate will start again during the 2012 presidential campaign.