nb_cid nb_clickOther -tt-nb this.style.behavior='url(#default#homepage)';this.setHomePage('http://www.aol.com/?mtmhp=acm50ieupgradebanner_112313 network-banner-empty upgradeBanner
14
Search AOL Mail
AOL Mail
Video
Video
AOL Favorites
Favorites
Menu

Obama to offer new tax breaks for workers in election year budget pitch

Obama To Offer New Tax Breaks For Workers In Election Year Budget Pitch

By Jeff Mason and Mark Felsenthal

WASHINGTON Tue Mar 4, 2014 3:38am EST

(Reuters) - President Barack Obama will propose an expansion of popular tax credits for middle class and working poor Americans on Tuesday in a fiscal 2015 budget designed to serve as a blueprint for Democrats in this year's congressional elections.

The budget, which would also create automatic retirement accounts known as IRAs for some 13 million workers, has little chance of getting enacted.

But it codifies the president's policy priorities ahead of the November race, in which Democrats hope to keep control of the U.S. Senate and Republicans hope to expand their majority in the House of Representatives.

The budget signals a shift away from last year's emphasis on deficit cutting to a more pronounced focus on poverty reduction, a legacy-oriented goal the president is highlighting as he faces less than three years left in office.

Obama will unveil the document during a visit to a local elementary school at 11:30 a.m. EST.

His proposal would expand the Earned Income Tax Credit, a government anti-poverty measure that is meant to encourage low-income Americans to work. The expansion would cover some 13.5 million people who do not have children.

It would also make the program available to younger workers who are not currently eligible, the White House said.

The expansion, which would cost $60 billion, would be funded by closing loopholes such as the tax break for "carried interest," profits earned by wealthy investors who run private equity and other funds.

The budget also puts an emphasis on saving for retirement. It proposes to create automatic Individual Retirement Accounts (IRA) for those who do not have access to savings plans sponsored by employers.

"About 13 million workers would begin contributing to retirement savings through auto-IRAs as a result of this proposal," the White House said.

DEMOCRATIC PRIORITIES

The White House signaled last month that its new budget would not extend the olive branch to Republicans that was offered in its proposal a year ago.

Officials said the president would drop a suggestion to change how the government calculates inflation for Social Security and other federal benefits that could have led to income drops for older Americans.

The change, which was unpopular with Obama's base, was meant to show Republicans the president was serious about deficit reduction. But the White House did not feel Republicans responded with a similar concession and dropped the idea.

Instead, the 2015 document will include proposals to boost spending on infrastructure projects, job training, and preschool education programs - all Democratic priorities.

It expands a tax credit to help parents pay for childcare, benefiting 1.7 million families, and makes permanent a tax credit related to paying for college educations.

"The president's budget will show in real terms the choices we can make to expand economic opportunity and strengthen the middle class," the White House said.

The budget outlines how some $1.014 trillion will be spent on government agencies' discretionary programs ranging from the military to national parks. That level, roughly in line with this year's cap of $1.012 trillion, was set by a recent budget deal hammered out by lawmakers.

That figure is less than a third of the approximately $3.5 trillion the government is likely to spend next year. The rest will be paid out automatically through federal benefits programs that mostly care for the elderly and poor, including Social Security, Medicare and Medicaid.

(Reporting by Jeff Mason and Mark Felsenthal; Editing by Lisa Shumaker)

Join the discussion

1000|Char. 1000  Char.
Jim March 04 2014 at 8:39 AM

HMMM propose something that everyone knows can not be done, for the pure purpose of political points?? Why not just propose that anyone making less than 100k pays no tax? Or maybe a year long tax holiday for everyone? lol

Flag Reply +9 rate up
joanne March 04 2014 at 9:12 AM

For heaven's sake - there are not enough millionaires and billionaires to cover out of control govt spending - especially under the massively irresponsible obama reign.

If you want big ugly destructive govt you have to tax ALL the people. obamas approaching 8 TRILLION new debt in his 6th year proves that.

Flag Reply +7 rate up
1 reply
stevenjonessales joanne March 04 2014 at 9:19 AM

Yes, by paying all of W's bills.

Flag Reply 0 rate up
fsupl5 March 04 2014 at 9:12 AM

He will promise anything he thinks will help get his buddies into powerful positions.

Flag Reply +9 rate up
1 reply
stevenjonessales fsupl5 March 04 2014 at 9:18 AM

So you must be one of the 1%'ers.

Flag Reply 0 rate up
lovinny42 March 04 2014 at 1:48 PM

obama needs to get new writers for his teleprompter-- we've heard the lies before. IRA - where will this $ be going ? Right into obama's account ? Hope the American public doesn't fall for these lies. The man needs to be thrown out of the Whitehouse ,and deported back to Africa.

Flag Reply +8 rate up
lchap17156 March 04 2014 at 9:12 AM

Buying more votes?

Flag Reply +11 rate up
gking3n10 March 04 2014 at 9:14 AM

Where are the jobs? Repeat, where are the jobs? Obama hasn't a clue - he just gives away money to those who choose not to work. What is poverty - many have legitimate needs and many hand-outs are not based on poverty levels but rather two, three or four times the poverty level. He wants working at McDonalds and other fast food places to be a career for all their employees not just a transitional job for kids going to school who often are helping their parents out. The Dems have used false pretenses to remove kids from the work place. If they want a job they should be able to get one. I worked many hours while in High School and it was the best thing in the world for me as I learned very quickly what I didn't want to do for the rest of my life. It also made me a better student as I learned that education was the way to success. I got a Bachelors Degree and then a Masters and had a strong work ethic as a result. Give our kids a chance. Sitting at home playing video games isn't a career opportunity for most.

Flag Reply +11 rate up
2 replies
stevenjonessales gking3n10 March 04 2014 at 9:18 AM

Ask your right wing buddies.

Flag Reply +1 rate up
rostra gking3n10 March 04 2014 at 9:25 AM

Learn to read, then I might believe you went to college. The article is about tax breaks for WORKERS, not for those not in the workforce. In addition, it was the GOP that created, and enacted the Earned Income & Child Tax Credits under Nixon. EVERY GOP administration since that day has expanded the two programs. Throw in, the workforce participation rate has dropped EVERY YEAR since 1976, under every adminstration.

Flag Reply +2 rate up
whitentl March 04 2014 at 1:38 PM

Just keeps up with his lies.....wake up America. He's taking us down the drain and you're smiling while he does it.

Flag Reply +8 rate up
kensucharski March 04 2014 at 1:15 PM

WEAK -Just another diversion.
Keep your eye on the CBO that reports triples it's estimate of the drop in workforce by 2 million by 2017, 2.3 million by 2021. You can't hide bad policy in plain sight.
There are MILLIONS looking for gainful employment.

Flag Reply +8 rate up
kjb122854 March 04 2014 at 9:35 AM

Odumbo has no clue.We need good jobs not more handouts. His ideas are idiotic. Our president should do america a favor and resign as he is changing america to a second rate welfare country with no opportunity, controlled by a corrupt and inept government!

Flag Reply +6 rate up
1 reply
cpperez kjb122854 March 04 2014 at 10:05 AM

I bet ur a so called 'christian' u knucklehead. facts r that under bush there were more people on welfare but that was ok huh? the only inept people r ur kind [neo-cons] n ur 'obama is a muslim,he wasnt born in U.S., hes the anti christ, secretly as gay' in house of reps who only want more money for themselves n their ilk.

Flag Reply 0 rate up
1 reply
walt.hafer cpperez March 04 2014 at 11:02 AM

Get a jug of koolaid and go back in mamasitas basement.

Flag 0 rate up
jgesselberty March 04 2014 at 9:12 AM

It is quite obvious that this is an attempt to curry the favor of the working class in the upcoming mid-term elections, since they have been used as the cash cow for all the giveaways in the past and are seeing through the smoke and mirrors.

Flag Reply +10 rate up
1 reply
stevenjonessales jgesselberty March 04 2014 at 9:20 AM

As if the super rich have not had any "favors" given to them for the past three decades.

Flag Reply 0 rate up
aol~~ 1209600

Voting...

More From Our Partners