Victorious Obama signs bill to extend payroll tax credit
Obama signed the bill within hours of the Congress passing it after it was held up for days by the Republican leadership in the House of Representatives.
As pressure started building in, the House Republican leadership lead by Speaker John Boehner caved in to Obama's demand and was virtually forced to come back from vacation to pass the bill.
In his remarks to the press before he left for Hawaii, Obama thanked the Congress.
"I said it was critical for Congress not to go home without preventing a tax increase on 160 million working Americans, and I'm pleased to say that they've got it done. So I want to thank all the members of Congress for ending the stalemate and making this happen," he said.
"Because of this agreement, every working American will keep their tax cut, about a thousand dollars for a typical family, and that's -- translates into an extra USD 40 or so in every pay check. Vital unemployment insurance will continue for millions of Americans who are looking for work," he said.
He also asked Congressmen to return and keep working without "drama" and "delay" to reach an agreement that extends the tax cut, as well as unemployment insurance, through all of 2012.
The USD 33 billion measure also includes a two-month extension of emergency federal unemployment benefits and the so-called "doc fix," a delay in scheduled pay cuts to Medicare physicians.
House and Senate members will resume negotiation on a year-long extension of the tax cut -- along with a lengthier unemployment benefits extension and doc fix -- when Congress reconvenes in January.
But the breakthrough came not before some anxious moments this week, as Obama postponed his Hawaii trip amidst a stubborn Republican House leadership sticking to its ground.
However, a compromise agreement was reached between the Senate and the House yesterday, which accelerated the process of the passage of the bill, bringing tax relief to millions of middle-class Americans.
"This is a good day for the American people. And the American people's voice was heard, their concerns were heard, and we have responded. I also want to congratulate President Obama who showed great leadership in this effort and articulated to the American people what was at issue here in the Congress of the United States," House Minority Whip, Steny Hoyer told reporters.
"I am pleased that we have come together to make this agreement. This is a good Christmas present, a good Kwanzaa present, a good Hanukkah present for America," Hoyer said in a news briefing at the Capitol Hill.
In a statement, Democratic Leader Nancy Pelosi termed it as a victory for all Americans.
"The American people spoke out clearly and, thanks to President Obama's leadership, 160 million Americans will continue to receive their payroll tax cut nearly USD 40 per pay check in the pockets of the average family," she said.
The Democratic Congressional Campaign Committee Chairman, Steve Israel said the real winner is America's middle class who pushed House Republicans to a compromise that stopped this USD 1,000 tax hike on every working family.
"One hundred and sixty million working Americans will be spared a USD 1,000 tax hike on their already tight budgets," he said.
"We've succeeded in extending the middle class tax cuts for two months and now re-focus on the full year. This tax cut for middle income taxpayers should not be paid for by higher Medicare bills for seniors, but by asking billionaires to pay their fair share," he said.
Leading Republican presidential candidate Newt Gingrich called the two-month payroll cut extension a complete failure in leadership by both the President and the Congress.
"We need a long-term plan for jobs and economic growth, not short two-month Band-Aids. We must move now to cut taxes, reduce regulations, fully utilise America's energy resources and take steps to stabilise the value of the dollar," he said.