Congress sends tax deal to Obama

Congress passed a compromise deal late Thursday to keep alive Bush era tax cuts for all Americans and continue to provide unemployment benefits for millions of workers, with President Barack Obama set to sign the bill into law.

Members of the House of Representatives did their part two days after the Senate approved the bill, voting 277 to 148 to approve the deal. The bill will now be submitted for his signature.

Obama had previously said the bill was not perfect but said it would help grow the economy and create jobs in the private sector

House speaker Nancy Pelosi said Thursday ahead of the vote that proposals supported by Democrats and the President to cut taxes for middle class Americans would create jobs.

So here we are with a bill on one side of the ledger that benefits 155 million Americans. We have tax cuts for the middle class across the board. Everybody gets that tax cut, she said.

She was opposed to extending tax cuts to the top 2 percent of earners - those making more than $250,000, however. She noted a compromise was necessary.

[I]n order for the middle class to get the tax cut, the Republicans insist that those who make the top 2 percent in our country, that they get an extra tax cut- adding billions dollars to the deficit and not creating any jobs.

The $900 billion bill ealso sets the estate tax at 35 percent with a $5 million exemption.

Republican minority leader John Boehner, who is set to replace Pelosi as Speaker after a big win for his party in the latest election said early Friday it was critically important to extend all the tax cuts, citing an unemployment rate bordering on 10 percent.

Failing to stop all the tax hikes would have destroyed more jobs and deepened the uncertainty in our economy, he said.

The bill provides a 13-month extension of unemployment insurance benefits wanted by Democrats, and an extension of the ethanol tax credit, which is supported by both sides.

The measure also includes extensions of the American Opportunity Tax Credit for college tuition, the Child Tax Credit and the Earned Income Tax Credit, and a $120 billion payroll tax reduction for workers.