President Barack Obama will strike a firmly populist tone in his 2015 budget plan on Tuesday, proposing to pay for an expansion of a popular tax credit for the working poor by eliminating tax breaks claimed by wealthy Americans.
The proposal to expand one of the most popular U.S. government poverty reduction programs, the Earned Income Tax Credit, would cost $60 billion, a modest amount in a budget in which the president has $1.014 trillion in spending to parcel out, the White House said.
Continue Reading Below
Obama would pay for the tax credit expansion by closing tax loopholes exploited typically by wealthy fund managers or employees of professional service companies such as law, consulting or lobbying firms.
The president's budget request is a scant two-tenths of a percent higher than his 2014 budget of $1.012 trillion because both amounts were set in a congressional budget deal in January.
Even so, Obama's budget recommendation stands little or no chance of being approved as is by Congress, where Republicans, who control the House of Representatives, disagree with the president's policy priorities, such as spending government money on job training.
But the document will provide an agenda for Obama's fellow Democrats in an election year and help the president shift the debate to poverty reduction and middle-class betterment and away from deficit reduction, a theme that has dominated Washington budget battles for the past three years.
Obama will also try to use the budget to give a boost to the middle class, many of whose members are struggling to recover from the deep recession of 2007-2009, by making contributions to workers' tax-protected retirement accounts automatic. Currently, workers must elect to have such contributions made to Individual Retirement Accounts, and the White House says the switch will benefit about 13 million workers.
(Reporting by Mark Felsenthal; Editing by Peter Cooney)