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Obama's annual address to a joint session of
Congress on Tuesday night will continue his theme of income
equality, and the administration is optimistic it will find some
bipartisan support in the Republican-dominated House of
Representatives and Senate.
The proposals administration officials listed on Saturday may
still generate significant opposition from the Republicans
because they would increase taxes.
In a conference call with reporters to preview the taxation
aspect of Obama's address, one official said some of the ideas
the president is outlining already have "clear congressional
bipartisan support or are ideas that are actually bipartisan in
their nature."
Obama's proposals call for reforming tax rules on trust funds,
which the administration called "the single largest capital
gains tax loophole" because it allows assets to be passed down
untaxed to heirs of the richest Americans.
They also would raise the capital gains and dividends rates to
28 percent, the level during the 1980s Republican presidency of
Ronald Reagan.
As a way of managing financial risk that could threaten the U.S.
economy, Obama also wants to impose a fee of seven basis points
on the liabilities of U.S. financial firms with assets of more
than $50 billion, making it more costly for them to borrow
heavily.
The changes on trust funds and capital gains, along with the fee
on financial firms, would generate about $320 billion over 10
years, which would more than pay for benefits Obama wants to
provide for the middle class, the official said.
The benefits mentioned on Saturday would include a $500 credit
for families with two working spouses, tripling the tax credit
for child care to $3,000 per child, consolidating education tax
incentives and making it easier for workers to save
automatically for retirement if their employer does not offer a
plan.
The price tag on those benefits, plus a plan for free tuition at
community colleges that Obama announced last week, would be
about $235 billion, the official said. Specifics on the figures
will be included in the budget Obama will send to Congress on
Feb. 2.
"We're proposing more than enough to offset the new incremental
costs of our proposals without increasing the deficit," the
administration official said.
The State of the Union address is the president's annual chance
to lay out his plans. With Republicans controlling both chambers
of Congress after big wins in midterm elections in November,
Obama, a Democrat, faces an uphill task turning much of his
vision into legislation.
(Writing by Bill Trott; Editing by Frances Kerry and James
Dalgleish)
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