WASHINGTON - More than 515,000 additional Ohioans would be eligible for an expanded federal tax credit for low-income working Americans under President Barack Obama's proposed budget. In the $3.9 trillion spending plan unveiled yesterday, Obama wants to spend $60 billion during the next decade to expand the earned-income tax credit, which provides hundreds of additional dollars to working families every year.
WASHINGTON — More than 515,000 additional Ohioans would be eligible for an expanded federal tax credit for low-income working Americans under President Barack Obama’s proposed budget.
In the $3.9 trillion spending plan unveiled yesterday, Obama wants to spend $60 billion during the next decade to expand the earned-income tax credit, which provides hundreds of additional dollars to working families every year.
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In 2012, about 950,000 Ohioans got the credit, averaging $2,307.
Obama proposed doubling the tax credit for childless workers from $500 to $1,000, lowering the age of eligibility from 25 to 21 and increasing the income level at which the credit is fully phased out to about $18,000 (about 150 percent of the federal poverty level for a single adult).
To finance the expansion, Obama wants higher taxes on wealthy investors who run private equity funds.
If Congress approves the plan, nearly 8 million workers nationwide would qualify for the larger credit, with 5.8 million eligible for the first time.
In a speech at an elementary school in Washington, Obama said, “The most effective and historically bipartisan way to reduce poverty and help hardworking families pull themselves up is the earned-income tax credit.”
But Obama’s overall budget is unlikely to become law. Instead, the document may serve as a starting point for Democrats and Republicans looking to draw distinctions before November’s midterm elections.
The budget — for the federal spending year that starts in October — also includes $160 million for continued clean-up of the former nuclear site at the Portsmouth Gaseous Diffusion Plant near Piketon in southern Ohio. In addition, the budget sets aside $104 million for both Portsmouth and a similar plant in Kentucky to help convert depleted uranium waste into a safer form for reuse or disposal at the two facilities.
The cleanup money is separate from $118 million approved by Congress in January for a Maryland company that wants to launch a uranium-enrichment facility at Piketon.
The budget cuts $430 million from the Clean Water State Revolving Fund, including more than $150 million to Ohio and seven other Great Lakes states, according to the National Wildlife Federation’s Great Lakes Regional Center.
The fund helps cities and regions fix and upgrade wastewater infrastructure to keep sewage overflows from running into the Great Lakes and the rivers and streams that lead into them. The runoffs are believed to be part of the problem contributing to algae blooms in the Great Lakes.
The earned-income tax credit has long been a favorite of conservatives because it rewards people for working. The law originally was signed in 1975.
Democrats such as Sen. Sherrod Brown of Ohio hailed Obama’s call to expand the credit.
“It’s vital that we pursue policies that reward Americans for hard work and provide them greater opportunities,” Brown said. “We can accomplish this by strengthening the EITC and expanding its eligibility to workers without children.”
But Obama disappointed advocates of smaller deficits and steered clear of a fight with Democrats by avoiding any new spending restraints on Social Security, Medicare and Medicaid. By doing so, the White House acknowledged that the government would run annual deficits in excess of $400 billion through 2024.
“After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet,” said House Speaker John Boehner, R-West Chester. “In the president’s vision for our future, America’s budget never balances — ever.”
Obama’s budget was even more theatrical than usual. Senate Democrats have signaled that they are unlikely to pass a budget this year and would consider Obama’s proposal as a supplement to spending bills. Congress just approved a $1 trillion budget deal late last year.
Sen. Rob Portman, R-Ohio, said, “Rather than laying out a path to address our economic challenges and spur job creation, this budget increases spending next year alone by $100 billion, dramatically raises taxes by $1.2 trillion, and adds $8.3 trillion to our national debt.”
Rep. Pat Tiberi, R-Genoa Township, said, “President Obama’s budget is more of the same — it increases taxes, increases spending, increases our debt and increases the burden on middle-class families.”
Information from McClatchy Newspapers was included in this story.