US News

Obama signs $858B tax compromise, extending Bush cuts for two years

President Barack Obama signed into law Friday a bipartisan $858 billion tax bill that extends the Bush-era tax cuts for another two years and boosts social spending measures.

Speaking in the White House South Court Auditorium with many of the administration’s bold-face names in attendance — including Vice President Joe Biden and Treasury Secretary Tim Geithner — Obama took pains to praise Republicans who helped the legislation pass overwhelmingly in Congress.

“It’s a good deal for the American people,” Obama said. “This is progress, and that’s what they sent us here to achieve.”

The law extended all the tax cuts put in place by former President George W. Bush in 2001 and 2003 for two years in exchange for a 13-month, $56 billion extension of unemployment benefits for two million out-of-work Americans.

It also included a one-year, two percent drop in the payroll tax rate from 6.2 percent to 4.2 percent, as well as other tax cuts for lower income Americans. In addition, it set the estate tax at 35 percent on estates worth more than $5 million in 2011 and 2012.

“This is real money that is going to make a real difference in people’s lives,” Obama said.

The House of Representatives passed the legislation 277-148 late Thursday, one day after the Senate approved in a 81-19 vote.

Many of the president’s fellow Democrats were unhappy with the bill, concerned that the tax rates and estate tax provisions constituted too much of a break for wealthy Americans.