Nightly News   |  December 17, 2010

President Obama strikes tax cut deal

After long negotiations with leaders on Capitol Hill, President Obama signed into law Friday a deal to extend Bush-era tax cuts as well as unemployment benefits for out-of-work Americans. NBC's Savannah Guthrie reports.

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>>> good evening. they've been arguing and fussing and fighting for months in washington. but tonight, the tax bill has been passed, delivered to the president and signed, and while no one seems quite happy about the whole thing, the important part is what now happens in american homes and lives and families. taxpayers are supposed to get a break on their upcoming taxes. our white house correspondent savannah guthrie starts off our coverage from the white house to the hill with a look at exactly what has happened here. good evening.

>> reporter: good evening, brian. the president portrayed this bill as a victory for the middle class but had to backtrack on a promise to let the lower bush tax rates expire. it was notable who was there and who wasn't. republican senate leader mitch mcconnell came, but democratic leaders nancy pelosi and harry reid did not, though there were other key democrats there. the president acknowledged this had been a tough compromise for some in his party to swallow.

>> candidly speaking, there are some elements of this legislation that i don't like. there are some elements that members of my party don't like. there's some elements that republicans here today don't like. that's the nature of compromise. yielding on something each of us cares about to move forward on what all of us care about.

>> reporter: this is a massive $857 billion tax package. it extends the lower tax rates enacted under george w. bush for two more years. it extends long-term unemployment benefits for 13 months. and the estate tax is capped at 35% and kicks in for estates over $5 million. the president said he believes the bush tax rates should expire for the top earners and they'll have a chance to fight on that again in two years, just in time for the presidential election.

>> savannah guthrie at one end