U.S. President Barack Obama said on Monday evening that the White House and Republicans had reached a compromise that would extend the soon-to-expire Bush-era tax cuts at all income levels for another two years.

Obama said at a White House press conference that differences between the two parties were "real and profound," but a compromise was "the right thing to do for the businesses and the right thing to do for the economy."

Obama noted that a 13-month extension of unemployment benefits would be given to the nation's millions of unemployed under the framework agreement with the Republicans.

The U.S. House of Representatives approved on Dec. 2 a bill to extend Bush-era tax cuts for the middle class Americans, letting extra cuts for the wealthy to expire. But the bill was blocked on Dec. 4 in the Senate since the Republicans vowed to extend additional low tax rates for the wealthy Americans as well.

Obama and Democratic congressional leaders previously intended to extend the tax cuts only for individuals making less than 200,000 dollars and married couples making less than 250,000 dollars annually.

However, Republicans want to extend the tax cuts for everyone, including the most wealthy taxpayers, claiming it was not appropriate to add taxes on anybody when the economic recovery and labor market were sluggish.

Obama noted that giving tax cuts to millionaires and billionaires does little to help the economy. The plan with Republicans was not "perfect", but an agreement with Republicans was better than a stalemate that would lead to higher income taxes facing the U.S. hard-working middle class since the start of next year.

There were leading Democratic congressional leaders in objection to the Obama plan including Senate Majority Leader Harry Reid, as they believed that tax cuts should only be extended to the middle class families, not the richest Americans.

Analysts hold that the two parties would continue discussing the tax cuts issue in coming weeks and finalize on a deal to be passed by the Congress.

"We cannot play politics at a time when the American people are looking for us to solve problems. I am confident ultimately that Congress is going to do the right thing," Obama added.