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Obama: Democrats Won't Stop Tax Deal

Dec 9, 2010 (All Things Considered)

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With a revolt by House Democrats against the tax-cut compromise he negotiated with congressional Republicans as the backdrop, President Obama told NPR's Steve Inskeep in a Thursday interview he was "confident" any final legislation would resemble the existing "framework."

A snippet from Steve's interview with the president, the full version of which will be heard on Friday's Morning Edition.

"STEVE: Can you accept some changes to this plan or is it the kind of deal you cannot change?

"PRESIDENT OBAMA: My sense is there are going to be discussions between both House and Senate leadership about all the final elements of the package. Keep in mind we didn't actually write a bill. We put forward a framework. I'm confident that the framework is going to look like the one we put forward...

"Here's what I'm confident about, that nobody — Democrat or Republican — wants to see people's paychecks smaller on Jan. 1 because Congress didn't act."

The framework is essentially a quid pro quo. Republicans wanted Bush-era tax cuts extended for income levels of more than $200,000 for individuals and more than $250,000 for couples. Though they wanted a permanent extension, they settled for a two-year one.

Republicans also got a lower estate tax than House Democrats were prepared to accept. Under the framework, the estate tax would fall to 35 percent and exempt the first $5 million for two years.

House Democrats preferred the tax that expired in 2009 — a 45 percent tax on everything over $3.5 million for individuals and $7 million for couples.

The president, like most Democrats, has opposed extending the higher-end tax cuts, preferring to extend them only for the middle class.

But he accepted the extension to the wealthiest taxpayers in exchange for extending unemployment benefits to the long-term unemployed for 13 months.

He also got a reduction in payroll taxes of 2 percentage points, as well as an expansion of the earned income tax credit and other tax credits directed at middle-income families and small businesses.

The president has said he took the best deal he could get and as part of the compromise actually got some concessions Republicans hotly opposed.

His acceptance of the extension of the high-end tax cuts has been called a "capitulation" and a "cave" by liberals who are accusing the president of betraying their values.

On the separate issue of the new START treaty, Obama sounded a similarly optimistic tone.

"STEVE: What understanding, if any, did you get from Republicans in these talks that you've had regarding START and other issues? Is there any understanding whatsoever?

"PRESIDENT OBAMA: My understanding with them is that START is going to be called and I am urging them to vote for the... treaty."

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