President Obama and the Republican leadership have agreed on a compromise which would extend the Bush era tax cuts for two years for all taxpayers. Not getting as much publicity is that a number of Obama's tax cuts will also be extended, and there will be a 2% reduction in Social Security taxes for 1 year.
The compromise is for legislation to be submitted for a vote in both Houses. We are already seeing some pushback from the liberal wing of the Democratic party, but it isn't clear if they have the votes to do anything. The "Tea Party Wing" of the Republican party hasn't been heard from yet, although the entire cost of the compromise is unfunded.