Tax plan imperfect but still a ‘good deal,’ Obama says

Reporting from Washington —  President Obama said Saturday that the compromise he reached with Republicans on tax cuts was “by no means perfect” but a “good deal for the American people.”

Obama, in his weekly radio address, said the middle class had been hit hardest by the recession and that “taking money out of the pockets of working people is exactly the wrong thing to do to get our economy growing faster.”

Economists say the tax hikes that would result if Congress failed to act could cost “well over a million jobs,” Obama said.

He said the typical middle-class family would have to pay an extra $3,000 in taxes next year if Congress did not sign off on the agreement. Votes are expected this week.

Obama said the vast majority of the tax cuts in the compromise with Republican leaders would help the middle class. The examples he cited:

•*A cut in payroll taxes would save the average family about $1,000.

•*A single mother in Ohio who has two children and works as a cashier would see a benefit of more than $2,300 through the tax cut and a larger tax credit for children.

•*A couple in Florida earning about $50,000 and trying to put one of their two children through college would save more than $4,000, including a $2,500 college tuition tax credit.

Obama said he knows many Democrats are uncomfortable with parts of the compromise, in particular extending tax cuts for the wealthy.

He said he shared that concern, and “over the long run, if we’re serious about balancing the budget, we cannot afford to continue these tax breaks for the wealthiest taxpayers — especially when we know that cutting the deficit is going to demand sacrifice from everything.”

In the Republican weekly address, Rep.-elect Kristi Noem of South Dakota called Obama’s proposed compromise on taxes “encouraging.”

“Failing to stop all the tax hikes would mean taxes would go up for small businesses all across this country, destroying more jobs,” she said.

Noem, drawing on the campaign playbook that ushered scores of Republicans to victory this fall, also called for cutting spending, reducing the size of government and repealing what she called the “job-killing healthcare law.”

kskiba@tribune.com