NEW YORK (CNN/Money) – When he delivers the State of the Union address Tuesday, President Bush will push Congress to approve a new kind of savings account, expand home ownership and privatize Social Security.
The president also will try to make permanent a slew of tax perks – including a reduction of capital gains and dividend taxes and an expanded child tax credit -- that are set to expire in coming years.
Bush will deliver the annual speech at 9 p.m. E.S.T. on Tuesday.
Overhauling Social Security
Experts say they anticipate the address will include another call to Congress to overhaul Social Security.
The issue was on his agenda when he ran for office and he appointed a bipartisan commission to study soon after he was sworn into office. But after the attack on the World Trade Center, it "fell to the sidelines," according to Michael Tanner, Social Security expert at the Cato Institute, a libertarian think tank.
"I think you'll see the beginning of a renewed push," said Tanner.
Specifically, expect Bush to propose allowing younger workers to invest their Social Security taxes in the stock market, while assuring retirees that their current benefits won't be reduced.
Permanent tax relief
Taxes also have been a cornerstone of the president's domestic agenda and he's been successful in getting Congress to approve massive cuts. In 2001, Congress passed a $1.35 trillion tax package, and last spring it enacted another round of tax cuts worth $350 billion.
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One way to get Democrats on board with those cuts was to make them temporary. Bush will now push for more, said Mark Luscombe, principal federal tax analyst at CCH.
"He's been pretty consistent in wanting to make the cuts permanent," Luscombe said.
The new $1,000 child tax credit, for example, is slated to shrink to $700 next year. Long-term dividend and capital gains tax rates – which now stand at 5 percent and 15 percent – are set to revert to 15 percent and 20 percent come 2009.
Estate taxes are slated to expire for 2010. But relief is temporary and they will be reinstated the following year for estates exceeding $1 million.
New savings plan
Bush is also expected to re-introduce a new tax-sheltered savings plan aimed at getting Americans to salt away more of their cash. The so-called Lifetime Savings Account would allow individuals to invest savings and have earnings grow tax-free.
They also would be withdrawn tax free and could be taken out at any time, for any purpose – such as buying a car or paying the bills. That's different than, say, a Roth IRA, which allows earnings to grow and be withdrawn tax free, but only at retirement. (A Roth imposes penalties for early withdrawals.)
For more on LSAs, click here.
Home ownership incentives
Finally, experts say Bush will continue pushing initiatives to boost home ownership. Specifically, he is expected to ask for new tax credits to developers who build affordable housing.
Such plans have been included in three previous budgets and have bipartisan support, said National Association of Realtors Spokesman Walt Molony.