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Fort Wayne Journal Gazette - Bayh, Lugar Back Extending Tax Cuts, Jobless Benefits

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Location: Washington, DC

Both Indiana senators will support the plan that includes an extension of the Bush-era tax cuts to all Americans - including the wealthiest earners - plus a 13-month extension of unemployment benefits and a reduction of payroll taxes for a year.

Although a number of Capitol Hill Democrats said they oppose the deal President Obama cut with congressional Republicans, Sen. Evan Bayh, D-Ind., said the economy is too weak to sustain the higher tax rates that would go into effect if the 2001 and 2003 tax cuts are not extended.

"Creating jobs and growing businesses must be our top priority until economic growth is on a self-sustaining path. In addition," he said, "the payroll tax cut for every working American will pump $120 billion into family budgets."

Sen. Richard Lugar, R-Ind., was one of the first Senate Republicans to publicly state his support.

"Stopping the scheduled tax increase is the biggest achievement in the bipartisan agreement, while we continue to extend a helping hand to those out of work," Lugar said.

Republicans prevailed on their biggest demand: continuing Bush administration tax cuts for the wealthiest Americans, despite Obama's 2008 campaign promise to let them expire for households earning more than $250,000 a year. Obama, while acknowledging Democratic unrest, agreed to extend the tax breaks for two years, whereas Republicans wanted a permanent extension.

Obama said the compromise package was necessary to help the economy and protect recession-weary Americans. He passionately defended his record against Democrats who complain he's breaking campaign promises.

"Take a tally. Look at what I promised during the campaign. There's not a single thing that I haven't done or tried to do," Obama said at a White House news conference.

"There are some who would have preferred a protracted political fight. And I understand the desire for a fight. I'm sympathetic to that," he said.

But Obama said a long political battle "would be a bad deal for the economy. And it would be a bad deal for the American people."

Lugar said the deal reached by Obama and the Republican congressional leadership "is an important first step in restoring the public confidence on the ability of Washington to act on the economic concerns facing all Americans.

"By passing the measures included in the agreement, along with continued congressional focus and action on reducing spending and expanding exports, Congress will provide greater investor certainty and help build public optimism that our economy is going to grow much stronger. This growth will bring more confidence to invest in new products and services that will create more jobs, and enhance our country's ability to compete around the globe."

Bayh, who has strongly advocated government action to lower the deficit, said that has to wait.

"Once the unemployment rate is trending down and businesses are growing, we must pivot and get the deficit and spending under control," he said.

"But now is not the time to raise taxes. It's time for additional assistance to working, middle-class families. That's what this proposal does."

Rep. Marlin Stutzman, R-3rd, did not return messages. He has said he supports extending the tax cuts for all brackets and voted against "no" last week on a bill to extend the cuts for lower- and middle-income taxpayers only. Stutzman has not stated whether he thinks the unemployment benefits should be expanded.

Obama's willingness to compromise with Republicans comes a month after the GOP won resounding victories in congressional, gubernatorial and state legislative elections.

Addressing his liberal critics Monday, Obama said, "Sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do."

"I'm not willing to let working families across this country become collateral damage for political warfare here in Washington," he said.


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