The President announced tonight a deal on the extension of ALL of the Bush tax cuts with Republicans. The deal, predicted some time ago here, (November 6th) will extend for two years all of the Bush tax cuts while also extending unemployment benefits for thirteen months. Also included was a 2% employee payroll tax rollback for 2011, as well as continuation of the increases in the Earned Income Tax Credit, Child Credit, and the American Opportunity Tax Credit. Republicans won a continuation of the Estate Tax at 35% with a $5 million dollar exemption.
Both sides argued in the run up to this about which portions of the prospective deal should be “paid for” with budgetary offsets. They did what you would expect them to do. They paid for none of it.
The initial reaction from Democratic lawmakers was cool, with some real bitterness being shown at the terms of the deal. If by chance Obama cannot deliver Democratic votes for this deal then all hell will indeed break loose. The left wants to fight, figuring Obama has misplayed his hand. While I think that a deal was necessary I do believe that the Republicans got the better of the President here. But that is a story for another post.