–Obama: Agreement Would Extend UI Benefits, Include Payroll Tax Holiday
–Obama: Accord Includes Estate Tax Adjustment, Host of Biz Credits
–Obama: ‘Wrong’ to Prolong Fight Over Tax Cuts; Must Get Done Soon
–Obama: Have A ‘Framework for a Bipartisan Agreement’
–Senior Admin Officials Say They Don’t Know Cost of Deal Yet

By John Shaw

WASHINGTON (MNI) – President Obama Monday night said that he has
reached the “framework of a bipartisan agreement” with congressional
leaders which would extend all of the Bush era tax cuts for two years
and extend unemployment insurance benefits for 13 months.

In an announcement at the White House, Obama said that it was
important to break the “stalemate” over the fate of the Bush era tax
cuts and to put in place policies that will bolster the American economy
as it slowly emerges from the recession.

He acknowledged that many in both parties would like to continue to
battle over tax policy, but he said there would be a great deal of
“collateral damage” that would be inflicted on the American people.

“It would be the wrong thing to do,” he said, adding that there is
little to gain by “waging symbolic battles or winning symbolic
victories.”

Obama said that following test votes on taxes in Congress last
week and this weekend, he decided it was time to reach an agreement
with lawmakers.

The package, he said, is “an essential step on the road to
recovery.”

“We can’t allow this moment to pass … . I’m confident this needs
to get done,” he said.

The president said the package would also include extending a host
of tax credits, including generous business tax expensing provisions
that should spur growth.

Obama said a centerpiece of the agreement would be a 2 percentage
point reduction in the employee share of payroll taxes in 2011. This, he
said, would be “one of the most powerful things we can do to create jobs
and boost economic growth.”

Senior administration officials later said in a conference call
that the payroll tax holiday provision alone would cost $120 billion.

Administration officials said the agreement would set the estate
tax at 35% above a $5 million per person threshold.

The administration officials said the White House does not know how
much the full package will cost, adding they are awaiting estimates from
Congress’s Joint Tax Committee.

Based on rough estimates, it seems likely that the plan will cost
at least $700 billion over two years.

Administration officials said many details of the agreement
still need to be nailed down.

Congressional reaction so far has been muted, with Democrats
appearing cooler to the framework than Republicans. Vice President
Joe Biden will meet with Senate Democrats Tuesday afternoon.

As more details of the pact are released and cost estimates are
provided, congressional reaction will be easier to gauge.

** Market News International Washington Bureau: (202) 371-2121 **

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