WASHINGTON:
President Barack Obama proposed new tax credits and job-training
programs for US workers on Tuesday in a 2015 budget that highlights
stark differences with Republicans, who favor a reduced government role
in promoting economic opportunity.
The
election-year blueprint is all but certain to be rejected by the
Republican-controlled House of Representatives and stands little chance
of passage.
But it
sets out the Democratic president's policy priorities ahead of November
congressional elections, in which his party hopes to keep control of the
US Senate and avoid losing ground in the House.
The
blueprint for the 2015 fiscal year that begins on Oct. 1 would increase
tax credits for the working poor, boost spending on roads and bridges
and expand early-childhood education.
Obama's
proposal signals a shift away from last year's emphasis on deficit
cutting to a greater focus on fighting poverty, a goal the president is
highlighting as he faces less than three years left in office.
The
debate over Obama's controversial healthcare reform law is likely to
feature prominently in the elections, but poverty reduction and
Americans' slow recovery from the 2007-2009 recession are also likely to
be major themes.
House
Budget Committee Chairman Paul Ryan, a potential Republican
presidential contender in 2016, argued in a report on Monday that the
government had barely made a dent in combating poverty over the past 50
years despite massive spending.
Obama
and Ryan disagree on the role government should play in poverty
reduction, but they both back the Earned Income Tax Credit, an
anti-poverty measure that is meant to encourage low-income Americans to
continue working.
Obama's
budget proposes expanding the program to 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
EITC for families with children lifts millions out of poverty each year
and helps about half of all parents at some point in their lives,"
Obama wrote in his budget document.
"But
as a number of prominent policymakers, both progressive and
conservative, have noted, the EITC does not do enough for single workers
who do not have kids."
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. Obama has
long sought to end that tax break, which allows financiers to treat such
income as capital gains, making it subject to a tax rate of only 20
percent, instead of the nearly 40 percent top rate on ordinary income
paid by the highest earners.
Representative
Dave Camp, the Republican chairman of the powerful House Ways and Means
Committee, also proposed last month to "clean up" the carried interest
deduction, but tax reform is not expected to get traction in Congress
this year.
SAVINGS, NO OLIVE BRANCH:
Obama
will unveil the document during a visit to a local elementary school,
giving him a chance to highlight the proposal's emphasis on boosting
funding for education, which has gotten little support from opposition
lawmakers.
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.
Obama
dropped 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
proposed cost-of-living change, which was unpopular with Obama's
Democratic allies, was meant to show Republicans the president was
serious about deficit reduction. White House officials said Obama
abandoned it after Republicans declined to offer concessions of their
own.
Overall, Obama's
proposed budget for 2015 would spend $3.9 trillion, leading to a $564
billion budget deficit, or 3.1 percent of the nation's gross domestic
product. That would be down from a $649 billion deficit, or 3.7 percent
of GDP, in fiscal year 2014.
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