President Obama is defending his compromise with Republicans to extend tax cuts. Some of the president's fiercest critics come from his own party.
The plan would provide temporary relief to people across all income levels, extending the Bush tax cuts for everyone, even the wealthiest Americans. Unemployment benefits would also get an extra lifeline. Experts say it will help a lot of people, but it will cost a lot.
Ugertha Smith-Savage of
“I would greatly appreciate that because people are in such tough binds right now,” said Smith-Savage.
The president announced the plan Monday. The compromise between him and Republicans would extend all the Bush-era tax cuts for two years. It also includes a 13-month extension of long-term unemployment benefits, and a one-year reduction in the payroll tax.
“This is real money, for real people, that will make a real difference in the lives of the folks who sent us here,” said Obama.
But it still has to go through Congress.
“If they stick to their words, hallelujah,” said Smith-Savage. “It’ll be a good thing.”
The plan has some Democrats upset that the president will allow tax cuts for the wealthy.
“Nine hundred billion dollars on the national debt is a big IOU to the American people,” said Rep. Peter Welch (D-VT).
Rep. Marlin Stutzman (R-IN) didn't have any comment on the tentative plan. His office restated his desire that “the current tax level should be maintained for all Americans.”
IPFW professor Michael Wolf doesn't expect the newly proposed plan to fail.
“We'll hear a lot of complaints by members of Congress on both sides, but they will pass this,” said Wolf.
Wolf says no one wants to raise taxes right now. Plus, many people still don't have jobs and need unemployment checks. But, he says, it's going to cost a lot.
"Definitely the tax cuts are costly. To some extent, certainly the unemployment benefits are costly,” said Wolf. “It's the least worst, probably, of what could come out. There was a necessity to have a compromise here.”
Congress must do something before its lame duck session ends at the end of this month. Otherwise, taxes will go up January 1.