WASHINGTON–Life insurance agent trade groups had a guarded reaction to the proposed compromise tax cut unveiled by President Barack Obama late Monday.

Comments by officials at the Association for Advanced Life Underwriting (AALU) and the National Association of Insurance and Financial Advisors (NAIFA) were both made as President Obama prepared to hold a mid-afternoon press conference in an effort to create support within his own party for the expensive proposal.

Democrats in both the House and Senate angrily opposed a provision of the proposal that would extend the Bush-era tax cuts to even the wealthiest taxpayers.

Both AALU and NAIFA again reiterated that their priority is establishment of sustainable and certain estate tax policy.

But they both noted that many details were lacking–for example, whether the deal would include reunification of the estate and gift tax and what special rules would be crafted for taxpayers who have died in 2010.

AALU officials said in their comments they were concerned about the long-term sustainability of the expensive proposal “in light of bipartisan recognition of the need to address escalating federal budget deficits.”

And NAIFA officials said they “hope that the reported two-year agreement on estate tax rules between President Obama and Congressional leaders will in fact turn out to be the beginning of political sustainability and certainty.”

Under the deal, each person would receive a $5 million exemption from the estate tax, and the top rate would be 35%, the level favored by Republicans as a compromise to their demand for an end to the estate tax. The package would expire in two years.

Under legislation proposed by Rep. Earl Pomeroy (D-N.D.) in 2009, the rate would be a $3.5 million exemption and a 45% maximum tax rate. Pomeroy was defeated for reelection last month.

The deal includes a two-year extension of the Bush-era tax cuts. This is estimated to cost $314.9 billion, according to a Dec. 3 study from the nonpartisan Congressional Research Service.

It also includes a 2% rollback of individuals’ payroll taxes that are used to fund Social Security. The White House said the cost of this one-year measure is $120 billion and that it wouldn’t affect Social Security’s solvency.

Also included is a child tax credit, earned income tax credit and a credit to help students afford college.

Another provision would preserve extended jobless benefits, also known as unemployment insurance, for 13 months. The White House estimates a 13-month extension would cost $56 billion.

Republicans had balked at extending jobless benefits, saying they wanted it to be paid for either through costs cuts or new tax revenue. The White House has said paying for the unemployment-insurance extension, rather than borrowing the money for it, would limit its impact.

The unemployment insurance and payroll tax holiday, when combined, would cost an estimated $176 billion.

Businesses would also benefit. The proposed agreement would allow all businesses to expense 100% of their investments in 2011. The write-off would be retroactive to September 2010.

The Treasury Department has said this expensing provision could generate more than $50 billion in additional investment in the U.S. in 2011. It also includes a two-year extension of the research-and-development tax credit and other tax incentives to support business expansion.

In his comments, Nat Perlmutter, AALU president, noted that the trade group “is one of the strongest advocates for sustainable estate tax reform that will enable our members’ clients to plan with certainty.”

He said the estate tax component of the agreement “has considerable momentum, but must still be evaluated and approved by congressional Democrats and likely will need a 60 vote supermajority in the Senate.”

He said the AALU is concerned about the long-term sustainability of reform at these levels in light of bipartisan recognition of the need to address escalating federal budget deficits.

In addition, the details of the package are not yet clear, particularly reunification of gift and estate tax exemption levels–”a feature of reform that AALU has played a lead role in pursuing for the benefit of our members’ clients,” Perlmutter said.

Terry Headley, NAIFA president, said his group supported an estate tax law policy “that is politically sustainable and provides certainty to taxpayers who need to plan.”

Uncertainty about what the rules would be has swirled around this issue for the last 10 years and “has discouraged taxpayers who need to plan from doing so,” Headley said.

NAIFA hopes that the reported two-year agreement on estate tax rules between President Obama and Congressional leaders “will in fact turn out to be the beginning of political sustainability and certainty,” he said, noting a lack of detail about the estate tax proposal.

“As is well known in Washington, the devil is in the details,” Headley said.

For instance, NAIFA supports the reunification of the estate and gift tax rules. “At the moment it is not known whether this agreement includes this feature,” he said.