The US President has conceded to Republicans over his objection to extend tax breaks brought in by the Bush administration for a further 24 months in order to get agreement over a range of tax benefits for middle class Americans including a child tax credit, college tuition credits and a payroll tax holiday.
The tax breaks will remain in force until the next Presidential election and Mr Obama has made it clear that he will oppose them then. The Democrats lost control of Congress during the mid-term elections next month and need to find common ground to get legislation passed.
Mr Obama accused his Republican rivals of holding the middle class as hostages in the tax discussions, indicating that they would not agree to help them unless the wealthiest Americans also got their share of concession.
Obama defended his decision as being in the national interest since a prolonged fight over the tax breaks would be counterproductive and would harm those Americans he was most keen to see helped.
On Friday, the unwelcome news was released that US unemployment had risen to 9.8%, the highest rate seen since April and re-igniting fears over the strength of the US recovery which had been surprisingly bullish recently.
15.1 million Americans are currently unemployed. One of the decisive factors behind the Federal Reserve’s decision to embark on a second round of quantitative easing was to provide an economic stimulus to the economy that would lead to higher employment levels. The news of the unemployment figures sent the Dollar down against other major currencies at the time, but it has started to recover from the setback in trading this week.
Obama Agrees To Extend Tax Breaks To Wealthy Americans
Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.