President Barack Obama announced the parameters of a tentative deal with Republicans on extending the Bush tax cuts, acknowledging that he still strongly opposes the extension of cuts for the very wealthy but saying that continuing a fight at the expense of the middle class would be "the wrong thing to do."
"We have arrived at a framework for a bipartisan agreement," the president said, after noting that it is "abundantly clear" that Republicans will block a permanent extension of tax cuts for the middle class without an extension for top earners as well.
"As much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do," to delay resolution until the next year, Obama said.
Some of the broad parameters of the deal, reported by NBC's Chuck Todd, are:
-- 2-year extension of ALL Bush-era tax rates
-- 13-month extension of unemployment insurance
-- 2 percentage point decrease in the payroll tax for one year.
The overall cost in lost revenue to the government is at least $450 billion in 2011 (or a tad higher than the yearly cost of the 2009 stimulus) and could climb as high as $600 billion depending on how much the economy grows over the next two years.
In the deal will be some extension of small business tax breaks as well and a "fix" to address inflation indexing of the alternative minimum tax (AMT) rates.
*** UPDATE *** NBC's Kelly O'Donnell writes that Democratic sources say many liberal lawmakers object to a new provision on estate taxes which is included in the tax package. On inheritances greater than $5 million dollars, the rate would be 35 percent.
That's in addition to objections about extending the rates for the highest earners.
Per Hill sources, Speaker Nancy Pelosi was very direct with the president this afternoon that a significant number of her members do not support this package.
Aides called it a deal with Republicans but not a done deal.
In a statement released after Obama's remarks, a spokesman for Senate Majority Leader Harry Reid said simply: "Now that the President has outlined his proposal, Senator Reid plans on discussing it with his caucus tomorrow."
Msnbc.com Carrie Dann contributed.