WASHINGTON (MNI) – The following is a fact sheet released by the
White House Tuesday with details of the tax cuts agreement reached with
Republican leadership and announced by President Obama Monday:

The framework agreement announced by the President secures vital
tax relief and investments in our workers that will create jobs and
accelerate economic growth. The plan has three key accomplishments:

– Working families will not lose their tax cut. A typical working
family faced a tax increase of over $3,000 on January 1st. That’s
avoided under this framework agreement, and working families won’t see
their tax cuts go away next year.

– Focused on high impact job creation measures. The framework
agreement includes some of the best measures for jumpstarting growth and
job creation, including a full year of emergency unemployment insurance
benefits, an about $120 billion payroll tax cut for working families and
a continuation of tax credits for working families. This is on top of
growth generated by extension of the middle-class income tax rates.

– Does not worsen the medium- and long-term deficit. These are
responsible, temporary measures to support our economy that will not add
costs by the middle of the decade. The President does not believe it is
affordable to make the high-income tax cuts permanent and will continue
to have that debate in the years ahead.

Overview of the Framework Agreement:

– Extending the 2001/2003 Income-Tax Rates for Two Years. The
framework agreement includes a mutually agreed upon solution to the
impasse over taxes by extending the 2001/2003 income tax rates for two
years and reforming the AMT to ensure that an additional 21 million
households will not be hit with a tax increase. These measures will
provide relief to more than 100 million middle-class families and
prevent a tax increase of over $2,000 for the typical family.

– Additional Provisions Designed to Promote Vigorous Economic
Growth. In addition to the 2001/2003 rates, the Administration secured
several provisions that are vital for our economy’s growth, which would
not have been possible without this framework agreement: $56 billion in
unemployment insurance, an about $120 billion payroll tax cut for
working families, about $40 billion in tax cuts for our hardest hit
families and students; and 100% expensing for businesses next year.

1. GROWTH-ORIENTED PAYROLL TAX CUT FOR WORKERS:

The framework agreement reached by the administration includes an
about 2%, employee-side payroll tax cut for over 155 million workers
providing tax relief of about $120 billion next year. This tax cut will
have a major impact on jobs and growth creating substantial numbers of
jobs. It is widely recognized by economists across the political
spectrum as a high bang for the buck way to boost growth and was cited
by both major deficit reduction commissions as consistent with long term
fiscal discipline.

A payroll tax cut has been endorsed by experts and commentators
from across the political spectrum. Just last month, both the
President’s Fiscal Commission and the Bipartisan Policy Center’s Debt
Reduction Task Force described a payroll tax cut in 2011 as an effective
way to spur growth and job creation. The tax cut legislation would
provide for a transfer of General Revenues to the Social Security Trust
Fund, ensuring no negative impact on Social Security solvency. And, as
economist Nouriel Roubini wrote earlier this year, a payroll tax cut
would spur growth because for employees, the increased take-home pay
would boost much-needed economic consumption and advance the
still-crucial process of deleveraging households.

2. HIGH IMPACT, JOB CREATING TAX CUTS FOR WORKING FAMILIES

Economic studies consistently find that lower-income households are
the most likely to spend additional money, creating jobs and helping
overall growth. That’s why the Congressional Budget Office, for
instance, has concluded that policies aimed at lower-income households
tend to have greater stimulative effects. The President fought to
secure a two-year increase of the full Child Tax Credit and Earned
Income Tax Credit. These provisions will, together, provide ongoing tax
cuts to 12 million lower income families, with a total of 24 million
children. In addition, the deal fully extends the American Opportunity
Tax Credit for two years.

Child Tax Credit: The $1,000 child tax credit will be extended for
two years with the $3,000 refundability threshold established in the
Recovery Act. This extension will ensure an ongoing tax cut to 10.5
million lower income families with 18 million children.

* Earned Income Tax Credit: The Recovery Act included an
expansion of the EITC worth, on average, $600 in additional assistance
to families with 3 or more children. It also helped working married
families by reducing the marriage penalty in the EITC. Continuing this
tax cut for two years will benefit 6.5 million working parents with 15
million children.

Illustrative Family: A working family with three children making
$20,000 will continue to receive a tax cut of more than $2,000 as a
result of the EITC and Child Tax Credit expansions in this framework
agreement. The same family would receive an additional $400 tax cut from
the new payroll tax cut.

* American Opportunity Tax Credit: The Recovery Act included a
new, partially refundable tax credit of up to $2,500 to help students
and their families cover the cost of college tuition. This deal fully
extends AOTC for two years, ensuring that more than 8 million students
will continue to receive this tax benefit to help them afford college.

3. UNEMPLOYMENT INSURANCE:

The framework agreement extended unemployment benefits at their
current level for 13 months, through the end of 2011. This will save
millions of Americans searching for work from losing their unemployment
benefits in the coming months and will help create hundreds of thousands
of jobs.

– In December alone, 2 million workers who would have lost benefits
will continue to receive them because of this framework agreement. Over
the next year, 7 million workers will no longer need to worry that their
unemployment benefits could be eliminated as they search for jobs.

– According to the Council of Economic Advisers, passing this
provision will create 600,000 jobs in 2011 alone.

4. BUSINESS TAX CUTS TO INCREASE INVESTMENT AND GROWTH:

In September, the President called for temporarily allowing
businesses to expense all of their investments in 2011. This
growth-oriented tax cut was included in the framework agreement.

– According to the Treasury Department, complete expensing could
generate more than $50 billion in additional investment in the U.S. in
2011.

– The provision will provide a crucial incentive to 2 million
businesses to invest and create jobs in the U.S and would be the largest
temporary investment incentive in American history.

– The framework agreement also includes a 2-year extension of the
R&D tax credit and other tax incentives to support business expansion.

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

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