Tax-cut deal signed into law

WASHINGTON - With an end-of-year deadline bearing down on them both, President Obama and Senate Republican leader Mitch McConnell put auld acquaintance behind them Friday, standing before television cameras together as their sweeping tax-cut compromise became law.

The president's signature on the bill means the George W. Bush tax cuts will continue for two years, rather than expiring at midnight on New Year's Eve under the old law.

But whether the moment foretells a season of cooperation between the two men and their parties is far from a given, as they forge a new relationship in the final days of the Democratic-led Congress and anticipate a new one with Republicans in charge of the House in January.

At the joint appearance at the bill-signing ceremony, Obama applauded their act of bipartisanship, with Rep. Dave Camp (R., Mich.) also in attendance. But the president neither predicted nor promised more such ceremonies.

"There will be moments of the next couple of years," Obama said, laughing, "when the holiday spirit won't be as abundant as it is today."

McConnell, somber in his dark suit, merely watched the president use several pens to sign the act, then shook Obama's hand and said nothing.

Obama singled out several other lawmakers in his expressions of thanks for their work on seeing the tax deal through, including Reps. Allyson Y. Schwartz (D., Pa.) and Robert E. Andrews (D., N.J.).

Besides continuing the tax cuts, the $858 billion bill reduces the payroll tax and extends long-term unemployment benefits for 13 months.

For Republicans, the biggest upside of their act of cooperation is keeping the Bush tax cuts in place at all levels, while Obama wanted to limit them to the first $250,000 of a family's income, $200,000 for individuals.

Democrats hope the tax cuts and unemployment extras will help their supporters get over the deal to keep the breaks for the wealthy.

The White House sees the accomplishment as an important message to independent voters: that Obama is the post-partisan consensus builder he promised to be.

"This package is a result of leaders coming together," Vice President Biden said Friday, applauding McConnell, Camp, and other Republicans who he said were "willing to take issue with some in their own party and do what was necessary, in their view, to move the country forward."

Both sides are bracing for blowback from within their own parties. Already, former Alaska Gov. Sarah Palin has complained that extending the cuts for only two years introduces too much uncertainty into the economy. Former Massachusetts Gov. Mitt Romney said this week that uncertainty was "not a friend of investment, growth, and job creation."

House Minority Leader John A. Boehner (R., Ohio) did not attend the signing ceremony because he did not negotiate the deal.

In his weekly news briefing, Boehner described the deal as action to "stop all the job-killing tax hikes set to take effect on Jan. 1." But he did not use the moment to herald cooperation to come.

"It's a good first step," Boehner said of the tax deal, but "if we actually want to help our economy get back on track and to begin creating jobs, we need to end the job-killing spending binge, we need to cut spending significantly, and we need to provide more certainty to small businesses around America."

The tax-cut measure signed into law Friday by President Obama:

pay 4.2 percent to Social Security instead of

6.2 percent.

on most capital gains and dividends, and adjusts the alternative minimum tax to spare as many as 21 million households from it.

SOURCE: Associated PressEndText