Extend child tax credits and marriage-penalty fixes

Obama keeps Bush's child tax credits and marriage penalty fixes

Updated: Thursday, March 5th, 2009 | By Angie Drobnic Holan

President Obama has said he would roll back the Bush tax cuts on higher incomes, meaning $200,000 in income for singles and $250,000 for couples. But he intends to leave in place the Bush tax cuts for everyone who makes less than that.

In the case of this particular promise, the outline for Obama's 2010 budget shows he intends to keep expansions of the child tax credit, as well as adjustments that do away with a marriage penalty for couples who file jointly. These exemptions would phase out for people at higher incomes, who will see hefty rate increases under the Obama plan.

When the tax cuts were first enacted in 2001 and again in 2003, the legislation came with "sunsets," or scheduled expiration dates. Without further action, tax rates will go up for everyone in 2011; at the time it was considered a way to rein in future deficit projections. So new legislation is required to keep in place those current policies, and the budget outline indicates Obama intends to pursue that legislation.

Congress still needs approve Obama's budget, and there will likely be arguments over many things in it. But little opposition is expected to retaining the child credit expansions and marriage penalty fixes. For now, though, we're rating this promise In the Works.

Sources: Office of Budget and Management, Budget Documents for Fiscal Year 2010 , Feb. 26, 2009