The White House proposed new tax credits yesterday designed to help low-income workers, who must be convinced that even bottom-rung jobs are preferable to welfare, according to administration officials.
President Clinton proposed expanding the earned-income tax credit, which provides an annual payment to 19 million working families at or near the poverty line. And today in New York, aides said, he will propose expanding a tax credit for those willing to invest in economically struggling regions, part of the "New Markets" initiative he launched last year.
"The main idea here is still the old idea of the American dream, that if you work hard and play by the rules, you ought to have a decent life and a chance for your children to have a better one," the president said in a speech at George Washington University sponsored by the centrist Democratic Leadership Council. He said studies have found that the earned-income tax credit "is an enormously powerful incentive to work."
"It encourages people who are on welfare, who are unemployed, to move into the work force, even in modest-paying jobs, because their income will be, in effect, increased," Clinton said.
Today, Clinton is scheduled to make two appearances in New York City, where he will call for doubling the amount of money available for the New Markets tax credit and a similar "empowerment zone" tax credit. The New Markets incentive offers a 25 percent tax credit to companies that invest in community development organizations in designated regions--both rural and urban--that continue to suffer high unemployment.
Clinton last year proposed spending $1.2 billion over five years for such credits. Today, he will call on Congress to increase the amount to $3 billion, said Gene Sperling, the president's chief economic adviser. He said Clinton also will propose expanding by $4 billion over 10 years the federal investment in empowerment zones, typically hard-pressed urban areas hoping to lure small businesses.
The president proposed adding $2 billion a year to the earned-income tax credit program, which now allocates $26 billion annually to the working poor. He would expand by $500 a year the maximum credit for families with three or more children, for a new cap of $4,491. His plan also would enable eligible families to save for retirement without being penalized, and it would ease the so-called marriage penalty that affects some couples earning low wages.
Clinton's proposal might get a cool reception in the Republican-led Congress. Rep. Bill Archer (R-Tex.), chairman of the House Ways and Means Committee, issued a statement saying the earned-income tax credit has enjoyed bipartisan support but "taxpayers might question spending billions more on a program that the IRS says already wastes close to $6.5 billion each year--or about one dollar out of every five--because of fraud and mistakes."
Also yesterday, the White House proposed increasing the budget of the environmental health laboratory at the Centers for Disease Control and Prevention. The lab seeks to understand the link between toxic exposures and illness, especially cancer. It now gets $17 million a year but would get $27 million in the 2001 budget.
Exposure to environmental chemicals is known or believed to raise the risk of breast, prostate and blood-cell cancers, some birth defects, and some chronic illnesses such as asthma.
The CDC lab will help state and local health departments track the incidence of diseases that may be caused in part by environmental exposure. It will also help pay for routine monitoring of toxins in selected communities and help fashion a response to emergencies such as pesticide spills.
Staff writer David Brown contributed to this report.