Obama Announces 'Framework' for Deal To Extend Current Tax Rates

President Obama unveiled a tentative deal to avoid the expiration of the almost decade old Bush Tax Rates at the end of this year.

Of course the deal is not done yet, so it is very tentative and the final outcome is not yet predictible.

The simple fact that extending these rates can only help the economy is simply incomprehensible to Liberal groups and Liberals in Congress who are all bouncing off the walls at the thought of compromise with Republicans. The very same Republicans that were elected in November to get the economy back in order by stopping the runaway spending and extend or make permanent the current tax rates.

Not everything in the Agreement is good. The "framework" of the deal that Obama outlined Monday evening calls for a two-year extension of the cuts in all income tax brackets. It also would extend long-term unemployment benefits through next year, which is something that is not good but necessary to get an agreement.

The estate (death tax) tax rate will be renewed, up from 0% to 35% but that is 20% lower than it would have been otherwise. And the Obama administration is proposing a one-year payroll tax reduction that sources say would cut the amount contributed to Social Security from 6.2 percent to 4.2 percent for one year. Another compromise since Social Security is already in financial trouble and cutting funding paid into it can only make it worse. We suspect that was done so the Administration can blame Republicans when congress is forced to increase payroll taxes on Social Security in the future.

"I have no doubt that everyone will find something in this compromise that they don't like," Obama said, but "we cannot play politics at a time when the American people are looking for us to solve problems." A confusing statement since it means he now believes they can no longer do what he and his party have been doing for the last 2 years. It is doubtful that he believes his own words.

House Republican Leader John Boehner said "It’s encouraging that the White House is now willing to stop all of the job-killing tax hikes scheduled for January 1, We look forward to discussing this proposal with House Republican members and the American people."

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