Friday, December 10, 2010

US tax cuts: Obama 'confident' Congress will pass deal

US President Barack Obama has said he is confident a tax cut deal he forged with Republicans will pass.

Mr Obama also called for a broad overhaul of the US tax code, pledging to begin the effort next year.

The White House is working to persuade reluctant Democrats to back the tax plan, which would extend Bush-era tax cuts, as well as unemployment pay.

House Democrats on Thursday voted to reject the initial deal but Mr Obama said negotiations would continue.
"Here's what I'm confident about: that nobody - Democrat or Republican - wants to see people's pay cheques smaller on 1 January because Congress didn't act," Mr Obama told US broadcaster National Public Radio in an interview aired on Friday.

But Mr Obama is facing a revolt within his own party. Several left-leaning senators, led by Sherrod Brown and Bernie Sanders, are threatening to filibuster the bill when it comes to the Senate.
A filibuster is a procedural tactic where senators talk non-stop in order to prevent a vote. Senators routinely threaten to filibuster, but they rarely actually carry one out.
Mr Sanders hinted at his seriousness on Friday, passionately railing against the tax cuts on the Senate floor for hours.

'Broad reform' needed Under a proposal the White House crafted with Republicans and announced this week, tax cuts enacted by President George W Bush in 2001 and 2003 and set to expire this year would be extended at all levels - including for the wealthiest Americans.

Some unemployment benefits would also continue, and the estate tax would be lowered.
Mr Obama and his Democratic allies had vigorously opposed allowing low tax rates for wealthy Americans to continue at a time of massive budget deficits, but Senate Republicans rejected Mr Obama's preferred approach and the president said he saw no option other than compromise.

In the interview on Friday morning, Mr Obama called for a broad reform of the US tax system, which he said would include broadening the tax base, closing loopholes available to "well-connected folks or people who have good accountants", and lowering rates.

"We've got to start that conversation next year," he said.
"I think we can get some broad bipartisan agreement that it needs to be done. But it's going to require a lot of hard work to actually make it happen."

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