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Obama Seeks Economic Boost With Trade, Tax Cuts

President Barack Obama pauses during a statement about the US-Korea Free Trade Agreement on in Washington, 04 Dec 2010

President Barack Obama pauses during a statement about the US-Korea Free Trade Agreement on in Washington, 04 Dec 2010

U.S. President Barack Obama is calling on lawmakers to help him boost the economy with a new trade deal and compromises on tax cuts.

Speaking Saturday to promote a new trade deal with South Korea, Mr. Obama called for speedy ratification of the pact in Congress.

He said the deal reached Friday after three years of stalemate could increase annual exports of American goods by up to $11 billion and create tens of thousands of jobs.

"I look forward to working with Congress and leaders in both parties to approve this pact because if there is one thing Democrats and Republicans should be able to agree on it should be creating jobs and opportunities for our people," he said.

But Mr. Obama expressed disappointment Republicans in the Senate blocked measures Saturday to make tax cuts passed by former president George W. Bush permanent for the middle class.

"Those provisions should have passed," said the president. "I continue to believe that it makes no sense to hold tax cuts for the middle class hostage to permanent tax cuts for the wealthiest two percent of Americans, especially when those high income tax cuts would cost an additional $700 billion that we do not have and would add to our deficit. But with so much at stake, today's votes cannot be the end of the discussion."

Republican lawmakers who voted against the initiative by Mr. Obama's Democratic Party want to make tax cuts permanent for all Americans, including the wealthiest. Republicans say this would help create jobs.

In the Republican weekly address, Illinois Senator Mark Kirk said the president and lawmakers should listen to voters who in November gave Republicans huge gains for the new Congress starting next year.

"These leaders should not raise taxes and risk another recession. Instead, Congress should reduce spending and prevent another tax hike on American taxpayers. Americans already pay some of the highest taxes in the world," he said.

If no compromise is found, current tax rates would expire for all Americans at the end of the year.

White House officials and a select group of lawmakers have been meeting over the past several days in an attempt to forge a compromise. Discussion points now include temporarily extending income tax rates, as well as extending jobless aid for the long-term unemployed, which are also starting to run out.

The struggling economy, including unemployment hovering near 10 percent, has recently been the main focus for the outgoing Democratic Party-dominated Congress, which will be replaced by a Republican majority House of Representatives and slim Democratic majority Senate in 2011.