White House Unveils Compromise On Bush Era Tax Cuts

President Barack Obama announced Monday evening that the administration is willing to compromise with Congressional Republicans on the Bush era tax cuts by granting an across the board two year extension for Americans in every bracket.

In exchange for the move, which bucks Congressional Democrats’ desire to prolong the tax cuts for those who make less than $250,000, there will be an extension of unemployment insurance for the next 13 months as well as a 2 percent cut on Americans’ payroll tax in 2011.

The compromise also includes the extension of a number of tax breaks in the Recovery Act and the fulfillment of a plan to allow employers to write off investments they make over the next two years are. An extension of the estate tax for individuals who make more than $5 million was also accepted.

Speaking from the Eisenhower Executive Office Building, Obama conceded that the move will likely anger those within his party, but explained that a prolonged battle would be detrimental to the economy since Republicans were unwilling to support legislation that would only exempt middle class families for a tax hike.

“I’m not willing to let working families across this country become collateral damage for poetical warfare,” Obama said. “I’m not willing to let our economy slip backwards.”

Whether or not the compromise can garner Democratic support remains to be seen. A statement from Senate Majority Leader Harry Reid’s (D-Nev.) office simply said the Leader will discuss it with the caucus on Tuesday.

The acceptance of the compromise will likely allow Democrats to move forward with their agenda. Last week, all 42 Republican Senators signed a letter promising to block all legislative items until the Bush era tax cuts were extended for all Americans.