The White House and Congressional Republicans have reached a deal that will extend the Bush tax cuts for all Americans for two more years.
In a statement this evening at the White House, President Obama spelled out the terms of a major agreement that will also extend unemployment benefits, among several other provisions.
"We have arrived at a framework for a bipartisan agreement. For the next two years, every American family will keep their tax cuts. Not just the Bush tax cuts, but those that have been put in place for the last couple of years that are helping parents and students and other folks manage their bills," Obama said.
Click here for more of Obama's argument in favor of the deal.
Sources tell ABC News that the president pushed for several items in the deal, including a 13-month extension of unemployment benefits beyond the current limit of 99 weeks. That will help some 9 million Americans.
The deal also includes a one-year payroll tax reduction for employees, from 6.2 percent to 4.2 percent for individuals. The Child Tax Credit will also be extended, along with extensions of the Earned Income Tax Credit, and the tax credit for college tuition.
According to sources, the agreement will also allow businesses to deduct 100 percent of certain investments in the next year, an idea endorsed by Obama in September. The agreement also calls for holding the estate tax at 35 percent for two years, with a $5 million floor.
Some Democrats have argued that the deal, which has not yet officially been agreed upon, doesn't go far enough. They say that the president signaled too quickly that he was willing to cave on the issue of extending tax cuts for wealthier Americans.
"I think a lot of people are wondering why President Obama doesn't fight for what he believes in a lot more," said Rep. Anthony Weiner, D-N.Y. "It seems like it goes from zero to fold in pretty fast time."
President Obama acknowledged the political grumbling, but he argued that a compromise was necessary to protect the American economy.
"Make no mistake, allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family, and that could cost our economy well over a million jobs," Obama said.
"I have no doubt that everyone will find something in this compromise that they don't like. In fact, there are things in here that I don't like, namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates," Obama said. "But these tax cuts will expire in two years, and I'm confidant that as we make tough choices about bringing our deficit down ... it will become apparent that we cannot afford to extend those tax cuts any longer."
Republican leaders reacted to the president's announcement more positively than some Democrats.
"I appreciate the determined efforts of the President and Vice President in working with Republicans on a bipartisan plan to prevent a tax hike on any American," said Senate Republican Leader Mitch McConnell in a statement.