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15 December 2010
Last updated at 13:48 ET
The US Senate has passed a compromise tax bill averting a New Year rise in income taxes for millions of Americans.
The deal forged by the White House and Republicans also extends unemployment pay for those out of work for nearly two years.
The bill's chances are less certain in the House of Representatives, where some Democrats are angry about tax breaks for wealthy Americans.
Mr Obama has said those provisions were necessary to win Republican support.
With the bill passing overwhelmingly in the senate, the $858 billion package now heads to the House.
Under a proposal that the White House crafted with Republicans and announced last week, tax cuts enacted by President George W Bush in 2001 and 2003 and set to expire this year would be extended at all levels - including for the wealthiest Americans.
Some unemployment benefits would also continue, and the estate tax would be lowered.
Mr Obama and his Democratic allies had vigorously opposed allowing low tax rates for wealthy Americans to continue at a time of massive budget deficits, but Senate Republicans rejected Mr Obama's preferred approach and the president said he saw no option other than compromise.
When Mr Obama announced the deal last week he said the deal was the only way to avoid damage to American families and the economy that he said would ensue if taxes rise and long-term unemployment benefits were allowed.
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The deal forged by the White House and Republicans also extends unemployment pay for those out of work for nearly two years.
The bill's chances are less certain in the House of Representatives, where some Democrats are angry about tax breaks for wealthy Americans.
Mr Obama has said those provisions were necessary to win Republican support.
With the bill passing overwhelmingly in the senate, the $858 billion package now heads to the House.
Under a proposal that the White House crafted with Republicans and announced last week, tax cuts enacted by President George W Bush in 2001 and 2003 and set to expire this year would be extended at all levels - including for the wealthiest Americans.
Some unemployment benefits would also continue, and the estate tax would be lowered.
Mr Obama and his Democratic allies had vigorously opposed allowing low tax rates for wealthy Americans to continue at a time of massive budget deficits, but Senate Republicans rejected Mr Obama's preferred approach and the president said he saw no option other than compromise.
When Mr Obama announced the deal last week he said the deal was the only way to avoid damage to American families and the economy that he said would ensue if taxes rise and long-term unemployment benefits were allowed.
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