News & Reports News Year 2010 December , 2010 Tax in US remain unchanged, Obama keeps Bush’s vast tax cuts for wealthy

Tax in US remain unchanged, Obama keeps Bush’s vast tax cuts for wealthy

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President Barack Obama Friday night signed into law a sweeping $858bn (£554bn) tax bill that ensures tax-rate cuts introduced by former President George Bush nearly a decade ago will remain in place for another two years, offering a potentially powerful fillip to the flat US economy.

The passage of the law on Capitol Hill was the most dramatic evidence yet that bipartisan compromise has been unexpectedly resurrected in the weeks after November's midterm elections. The deal was largely the one struck by Mr Obama and Republican leaders two weeks ago over the loud objections of his party's liberal wing.

Predictions of gridlock have not come to pass. Nor has the lame-duck session now winding down before the new Congress convenes, with a Republican-controlled House of Representatives, become becalmed as many predicted.

If the wind stays behind him, Mr Obama in the last days before Christmas may even see Congress overcome last-minute wobbles on ratifying the new Start treaty with Russia and on ending the ""don't ask, don't tell"" (DADT) ban on gays openly serving in the military.