US tax cuts: Obama signs compromise deal into law
- 17 December 2010
- From the section US & Canada
US President Barack Obama has signed into law a compromise tax bill agreed with the Republicans, averting income tax rises for millions of Americans.
Mr Obama said the $858bn (651bn euros; £542bn) package was "real money that's going to make a real difference".
The deal also extends benefit payments for some of the longer-term unemployed for 13 months.
The bill passed over objections from House Democrats about tax breaks for wealthy Americans.
Mr Obama said compromise was needed to win Republican support. The $858bn package was passed by 277 votes to 148 in the House of Representatives.
"There probably is nobody on this floor who likes this bill," House Majority Leader Steny Hoyer, a Maryland Democrat, said.
"The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they're right."
Under a proposal the White House crafted with Republicans and announced last week, tax cuts enacted by President George W Bush in 2001 and 2003 and set to expire this year would be extended at all levels - including for the highest-earning Americans.
In addition, inheritance taxes affecting only the wealthiest Americans would be lowered and payroll taxes would be cut for a year in a bid to spur consumer spending.
Mr Obama and his Democratic allies had vigorously opposed allowing low tax rates for wealthy Americans to continue at a time of massive budget deficits, but Senate Republicans rejected Mr Obama's preferred approach and the president said he saw no option other than compromise.
When Mr Obama announced the deal last week he said it was the only way to avoid the damage to American families and the economy that would ensue if taxes were allowed to rise and long-term unemployment benefits were not extended.
Congressman Anthony Weiner, a liberal New York Democrat, said on Friday that Republicans had out-negotiated Mr Obama, describing them as "better poker players".
As liberals in Washington have railed against the deal, some conservatives also took up opposition.
They noted the bill adds to the US budget deficit, while also objecting that the low tax rates - which have the biggest impact on the deficit - are only temporary.