MercoPress. South Atlantic News Agency

Obama signs bipartisan tax-cut bill resisted by hard core Democrats

“The nature of compromise”, according to Obama

United States president Barack Obama signed Friday into law an 858 billion US dollars bill extending for two years Bush-era tax cuts to boost a fragile economy and add jobs.

“It’s a good deal for the American people,” Obama said at a signing ceremony in Washington. “Putting more money in the pockets of families most likely to spend it, helping businesses to grow, that’s how we’re going to spark demand, spur hiring and strengthen our economy in the new year.”

Obama overcame resistance from congressional Democrats and labour leaders to broker a tax-cut deal with Republicans, who’ll take control of the House in January and gain Senate seats after last month’s elections.

“Candidly speaking, there are some elements of this legislation that I don’t like,” Obama said. “That’s the nature of compromise.”

The president signed the measure after meeting privately with about a dozen labour leaders, including AFL-CIO President Richard Trumka. Organized labour leaders opposed the tax-cut deal. The meeting was closed to press coverage.

Final action came late Thursday when the House voted 277-148 to pass the 858 billion USD package sending it to the White House. Before the final vote, lawmakers defeated an amendment offered by some Democrats opposed to a Republican- backed estate-tax proposal they said favoured the wealthy. Obama had lobbied wavering House lawmakers by telephone for much of the week, Bill Burton, a White House spokesman, said.

The plan extends all Bush-era tax rates through 2012, guaranteeing a fight over taxes during that year’s presidential campaign. It continues expanded jobless aid to the long-term unemployed for 13 months and reduces payroll taxes for workers by two percentage points during 2011.

Failure to pass the bill would “cause grave economic harm and possibly send us back into a double-dip recession,” said Representative Eric Cantor, a Virginia Republican who will become majority leader in January.

The Senate passed the tax-cut plan 81-19 on Dec. 15 with broad support from Democrats and Republicans.

The Business Roundtable, a group of chief executives, said in a statement that the payroll tax reductions, fresh investment incentives and the certainty of tax rates would help increase jobs and reduce the jobless rate.