Massive tax bill signed into law

WASHINGTON (RNN) – President Barack Obama signed into law the $858 million Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 Friday afternoon in the South Court Auditorium at the White House.

Senate Minority Leader Mitch McConnell, R-KY, was present for the signing, marking his first White House appearance under the Obama administration.

"I know that not every member of Congress likes every piece of this bill, and it includes some provisions that I oppose," Obama said in a statement before the bill went to the House where it would later pass with a 277-148 vote. "But as a whole, this package will grow our economy, create jobs and help middle class families across the country."

The legislation extends Bush-era tax cuts for two years, reduces payroll taxes 2 percent in 2011 and extends unemployment benefits another 13 months.

One of the most controversial portions of the legislation is the reduction in estate taxes. Now, individual estates will not be taxed up to the first $5 million, or $10 million for couples. The tax rate was reduced from 55 to 35 percent.

The costly bipartisan bill was met with criticism from both conservatives and liberals. Obama was roundly criticized by Democrats for his compromise in getting the bill passed, with former President Bill Clinton even coming to his side last week to publicly express his support.

The bill will be paid for by adding to the deficit.

"There's nothing in this bill that's fiscal sanity; it's insanity," Rep. Sam Farr, D-CA, said. "We fixed this debt by closing these tax loopholes, and now you want to give them away. Shame on you."

Former Republican vice presidential nominee Sarah Palin, in an interview with ABC's Robin Roberts on "Good Morning America," called the pending legislation "a lousy deal."

Palin said the government could do better for the American people.

"Congress, just hold off on this. President Obama, just hold off on this," she said. "Let the new Congress be seated and then let's do it right."

Palin said that what some may call Obama compromising with conservative lawmakers on this bill, is truthfully his flip-flopping on the issue.

"I appreciate that he - you can term it compromise, I term it flip-flop - I was thankful that he did, but it's still not good enough," she said.

The legislation could be viewed as an early Christmas present to the American people. Passage of the bill and Obama's signing it into law prevents taxes from being raised on Jan. 1.

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