The budget, which would also create automatic retirement accounts
known as IRAs for some 13 million workers, has little chance of
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
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
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
"About 13 million workers would begin contributing to retirement
savings through auto-IRAs as a result of this proposal," the White
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
[to top of second column]
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
(Reporting by Jeff Mason and Mark Felsenthal;
editing by Lisa
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