Obama announces accord on taxes

Senate Majority Leader Harry ReidHarry Mason ReidLobbying World Mitch McConnell is not invincible Seven big decisions facing Biden in 2020 primary MORE (D-Nev.) said he would speak to his caucus on Tuesday after the plan before responding to its contents. 

White House officials in a conference call with reporters didn't have a price tag yet on the package although estimates there were wide-ranging estimates between $500 billion and $800 billion. 

The 2 percent payroll tax cut -- cutting Social Security taxes from 6.2 percent to 4.2 percent -- is estimated to cost $120 billion, senior White House officials said. The payroll tax cut takes the place of the Making Work Pay tax credit that was included in stimulus and is expected to provide workers will with a larger tax cut next year, senior administration officials said. 

The cut applies to all workers and would give someone making $40,000 a year, $800 in tax relief in 2011, officials said. 

Other funds will be shifted into the Social Security trust fund to ensure its solvency, officials said. 

The unemployment benefits extension -- one of the most comprehensive plans put forth by any administration -- is estimated to cost $56.4 billion. 

The compromise plan also provides incentives to businesses who will be able to write off 100 percent of their expenses next year, providing about $150 billion in tax cuts for businesses, stepping down to bonus depreciation in 2012, officials said. 

Republicans pushed for two-year estate tax at a 35 percent rate with a $5 million exemption. Senate Finance Chairman Max BaucusMax Sieben BaucusOvernight Defense: McCain honored in Capitol ceremony | Mattis extends border deployment | Trump to embark on four-country trip after midterms Congress gives McCain the highest honor Judge boots Green Party from Montana ballot in boost to Tester MORE had proposed a 45 percent rate for estates at $3.5 million and higher. Officials didn't have cost estimates of tax on Monday night. 

All of the tax extenders in the package -- including the research and development tax credit -- have a duration of two years -- retroactive back to 2010 and running through next year. 

The measure also includes a two-year patch of the alternative minimum tax. 

Not included in the package is a repeal of the 1099 requirement for business, although congressional leaders in both parties differ on the pay-fors not on the need to eliminate the tax-filing requirement.