"My strong preference would be that we don't extend them, even for the two years I've temporarily agreed to," Obama told 9NEWS Political Reporter Adam Schrager on Monday. "But here's the challenge: Republicans made a decision that they would not extend tax cuts for middle class families, they would not extend unemployment insurance, they would not extend some of the critical business tax breaks we've put into place for things like clean energy unless they also got these tax breaks for wealthy individuals."
Obama called tax cuts for the wealthy an unnecessary mistake on the part of Republicans, but he says he agreed to the overall package, in part, because forecasters predict 4 percent economic growth with the package, compared to 2 or 2.5 percent growth if the tax package does not pass. He says that could mean up to 1.5 million new jobs nationwide.
"All told, the overall package is one that will help the country continue to recover after this horrendous recession that we've gone through, and my primary job as president of the United States is to make sure that I'm doing everything I can to grow the economy and reduce the unemployment rate," Obama said. "That's the single most important thing that I think people are counting on me doing right now."
Additionally, Obama says he is trying to do everything he can to make sure 2 million Americans don't lose their unemployment insurance at the end of this month.
"That may make the difference between them being able to make their mortgage or pay their car note or look after their kids," Obama said.
Obama spoke to 9NEWS, one of four stations selected nationwide, in order to "break out of the bubble" and let the American people in on what's going on in Washington.
"Washington is a very closed place and there's a lot of obsession about who's up and who's down politically at any given moment instead of what's happening on Main Street and what's happening with the American people," Obama said.
Coming out of the midterm elections, Obama says he wanted to focus on talking to people who have a better "finger on the pulse" of what's happening in America.
Although Obama admits the tax package is not ideal, he thinks Americans expect lawmakers to make "sensible compromises."
"Frankly, the Republicans are taking a lot of things that I think are important, like a year's worth of unemployment extension, or the tax credits for people who send their kids to college, child tax credits, some things that they probably think are bad ideas," Obama said. "But, that's the deal that we struck, and I think it's the right thing to do to make sure that on Jan. 1, people aren't opening up their paychecks and seeing it get smaller."
Many in Obama's own party, including Sen. Mark Udall (D-Colorado) are against the compromise on the tax bill.
"We are suffering from the worst possible case of collective short-term memory loss. During the past decade, tax cuts for the wealthiest Americans didn't lead to job creation and instead helped cause a skyrocketing deficit. Why would we believe it will be any different this time around?" Udall said in a statement. "I urge my colleagues of both parties, as well as the president, to coalesce around a solution that makes sense for our economy: pass the middle class tax cuts that everyone agrees will help the economy, and avoid piling onto our national debt with unnecessary tax cuts for millionaires and billionaires."
A test vote in the Senate on Monday showed the bill had a large amount of support. Udall voted against the bill.
Sen. Michael Bennet (D-Colorado) voted in favor of the bill. Bennet says the bill isn't perfect, but would ensure that middle-class Americans' tax bills don't increase in January.
The House has already rejected the proposal in its current form but said it may vote on the Senate bill with some changes.
9NEWS asked the president when there would be an upturn for working people in particular.
"Well, we've seen an upturn. We've now had five straight quarters of economic growth. We've seen positive private sector growth for 10 consecutive months, but obviously, for folks on the ground it doesn't always feel like things are happening as quickly as things need to," he said. "So, we're now in positive territory. We just haven't gotten to the place where people are actually feeling good about the economy."
He says the positive stories about economic improvement are important for people to hear.
"It's important for people to understand that folks have been struggling because of this recession, but they were actually struggling before the recession. The average middle class family, they saw their real incomes, when you factor in inflation, actually go down between 2001 and 2008. That was before the recession hit. And so, folks who are struggling out there, they want to know that there's a long-term plan for growth, there's a long term plan to make sure we're competitive internationally," Obama said.
Some of this, Obama says, lies in passing the tax bill, but he says structural fixes are needed as well.
"We've got to get our education system up to speed. We now rank ninth or 12th in math or science or other measures of performance when we compare to other kids internationally. We've got to improve our infrastructure which has fallen behind a lot of other countries. We've got to make investments in clean energy to make sure that solar and wind and biodiesel, that those energy sources of the future are being created here in the United States. So we've got a range of long-term challenges that we've got to deal with, but we're also right now digging our way out of a huge crisis, and I'm optimistic that we're going to be able to look back over the course of the next couple of years and say, 'You know what? We've weathered the storm, and we're now positioned to grow well into the future,'" he told 9NEWS.
Obama says he understands that many Americans do not believe he has done well in the past two years.
"No, I don't think there's a sense that I've been successful. I think people feel that Washington still is dysfunctional," he said. "I think people still feel that overall Washington is about a lot of politics and special interests and big money, but that ordinary people's voices too often aren't represented, and so my hope is that we're going to continue rebuilding a trust in government."
Obama says that is going to require cooperation between both parties.
"Part of what I think frustrates people is the constant partisanship and the constant looking at what's going to happen in the next election instead of looking out for the interests of the American people," he said. "It's my responsibility as president of the United States to ensure I'm rising above some of that and sending a message that we've got to do better than we're doing right now."
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