House Democrats Spurn Obama-GOP Tax-Cut Deal

Big news out of Congress. House Democrats are refusing to take up the tax-cut compromise in its current form agreed to by President Obama and congressional Republicans.

If that doesn't change, the Bush-era tax cuts will expire at the end of the year and taxpayers across the income spectrum will be facing significant tax increases come January 1.

Also, at least two million long-term unemployed Americans whose already extended benefits have run out or are about to, will find themselves with no more cash forthcoming from the federal government.

The House Democrats' decision could have major repercussions. President Obama warned Thursday that the economy could fall back into recession without the further stimulus that would come from the package.

Besides the additional jobless benefits, the package includes a payroll tax reduction of two percentage points, also meant to provide more stimulus to the economy.

But many Democrats and liberals have been furious over what they believe is Obama's capitulation to Republicans on extending the tax cuts to all the income of the wealthiest.

The president and congressional Democrats have for years railed against those top end tax cuts, saying that any extension should be limited to the first $250,000 if income for couples, $200,000 for individuals.

Obama said he still opposes the upper end cuts but got the best deal he could in order to ensure that most American taxpayers and the long-term unemployed needing benefits wouldn't be held hostage by Republicans refusing to budge unless there was a tax deal along the lines they sought.