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Clinton to propose low-income tax-credit boost

WASHINGTON: President Clinton Wednesday will propose a $22 billion expansion of tax credits for low-income working families, the first increase in the anti-poverty programme since 1993, White House officials said.

Clinton is expected to unveil his proposal in a speech that will preview domestic themes of his State of the Union address Jan. 27, officials said.

"Now that we've enjoyed seven years of an historic economic expansion, we want to build on that track record by increasing opportunities for those who are struggling the hardest to make ends meet," one official said.

"This is a sensible initiative with a proven record of success," he said.

The proposed 10-year expansion of the Earned Income Tax Credit programme would provide up to $1,155 in additional credits to a married working couple with three children, the officials said.

Some 6.4 million people would benefit from the initiative, they said.

Academic experts cite the 1993 expansion of the tax credit programme-a special tax refund for low-income workers-as a major contributor to the budgets of poor people.

The US poverty rate fell in 1998 to 12.7 percent, down from 15.1 percent in 1993 and the lowest rate since 1979, according to government statistics.

An administration official said last week that the White House was considering scaling back Clinton's 1999 proposal for government-subsidised retirement savings accounts as it expanded the low-income tax credit programme. Officials Tuesday declined to discuss the retirement accounts.

Clinton's proposal for the would expand the maximum credit for working families with three or more children by $500, raise the earning ceilings on married couples and reduce the rate at which credits are phased out for incomes above the maximum threshold, White House officials said on Tuesday.

The speech on Wednesday, at 1 p.m. will be made before the Democratic Leadership Council, a centrist policy workshop that has long supported the low-income tax credit programme.

Clinton will continue his anti-poverty theme on Thursday with a trip to Brooklyn touting his New Markets Initiative to improve the economies of poor areas.-Reuters