President Obama signs bipartisan tax legislation that extends tax cuts signed by former President George W. Bush and renews benefits for the unemployed during a ceremony on Dec. 17, 2010. (Saul Loeb/AFP/Getty Images)
President Obama signed $858 billion tax bill into law Friday afternoon, putting the final touches on a bipartisan compromise to prevent income tax rates from increasing before the new year.
The legislation preserves all Bush-era income tax breaks for two years, extends jobless benefits for 13 months, and cuts Social Security payroll tax rates by 2 percent for one year on income up to $106,800.
President Obama thanked Vice President Joe Biden and members of the House and Senate from both parties, who joined him for the signing ceremony.
“We are here with some good news for the American people this holiday season. By a wide, bipartisan margin, both houses of Congress have now passed a package of tax relief that will protect the middle class, that will grow our economy and will create jobs for the American people,” he said.
The legislation passed easily in the Senate, but it was held up in the House Thursday by Democrats who opposed cuts to the estate tax and income tax rates for the wealthy. The House eventually held a vote on the measure late Thursday night, passing the bill by a margin of 277 to 148, with most of the opposition coming from Democrats.
President Obama negotiated the details of the bill with Senate Republicans, who demanded that any extension of the Bush tax cuts needed to include all Americans. Democrats, including Obama, preferred to maintain the Bush-era tax rates only for families making $250,000 or less.
President Obama defended the compromise as a necessary step to keep the nation’s economic recovery in motion.
“There are some elements of this legislation that I don’t like. There’s some elements that members of my party don’t like. There’s some elements that Republicans here today don’t like. That’s the nature of compromise. Yielding on something each of us care about to move forward on what all of us care about,” President Obama said. “It’s a good deal for the American people, this is progress and that’s what they sent us here to achieve.”