Obama signs tax-cut bill, hails the compromise as progress
President wants to continue air of cooperation
WASHINGTON — President Obama signed into law a huge tax package extending cuts for all Americans yesterday, saluting a new spirit of political compromise as Republicans applauded and liberals seethed. The benefits range from tax cuts for millionaires and the middle class to longer-term help for the jobless.
The most significant tax legislation in nearly a decade will avert big increases that would have hit millions of people two weeks after New Year’s Day. “We are here with some good news for the American people this holiday season,’’ Obama said.
“This is progress, and that’s what they sent us here to achieve,’’ Obama said as a rare bipartisan assembly of lawmakers looked on at the White House.
The package retains George W. Bush-era tax rates for all taxpayers, including the wealthiest Americans, a provision Obama and congressional liberals opposed. It also offers 13 months of extended benefits to the unemployed and attempts to stimulate the economy with a Social Security payroll tax cut for all workers.
At a cost of $858 billion over two years, the deal contains provisions dear to both Democrats and Republicans.
The legislation renews programs that extend jobless benefits beyond the 26 weeks states provide. Those federal programs had expired Nov. 30. For the long-term jobless in Massachusetts, it will save an estimated 60,000 people from having benefits end by Christmas. Instead, many unemployed workers will remain eligible to apply for extended benefits through Jan. 3, 2012.
But because the state’s jobless rate is relatively low — it was 8.2 percent last month — unemployed workers will qualify for a maximum of 93 weeks of unemployment benefits, instead of the previous 99 weeks.
The provision will not help workers whose long-term benefits had already expired.
Dramatic as an economic and a political accomplishment, the agreement sets the stage for Obama’s new relationship with Congress in the aftermath of a midterm election that devastated Democrats and stripped them of control of the House.
Obama called for maintaining a spirit of cooperation, saying he is hopeful “that we might refresh the American people’s faith in the capability of their leaders to govern in challenging times.’’
To complete the deal, Obama set aside his vow to extend tax cuts only for the middle class and lower wage earners. The measure also enacts an estate tax that is more generous to the wealthy than Obama had sought.
Republicans said that their success in extending tax cuts for all was a sign of things to come.
“The American people are seeing change here in Washington; they can expect more in the new year,’’ said McConnell, who was singled out for praise by Obama and shook hands with the president after the signing.
McConnell was directed to stand next to the presidential desk where Obama was signing the bill, ensuring he would be prominent in the photos.
Globe reporter Megan Woolhouse contributed to this story.