The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
U.S. President Barack Obama Wednesday attempted to up the pressure on Congress to resolve the so-called "fiscal cliff," saying immediate action is necessary.
The Bush-era tax cuts expire and massive spending cuts kick in Jan. 1 if Congress doesn't act to rein in the federal deficit.
Obama and Republicans disagree on how to approach the issue, Obama advocating an increase in income taxes on incomes above $250,000 coupled with spending cuts, while Republicans insist on not raising marginal tax rates on incomes exceeding $250,000.
Economists have predicted if no action is taken, the U.S. economy will fall back into recession next year.
Obama initiated a campaign-like effort to enlist the public in pressuring Congress, urging Americans to flock to Twitter and post under the "#My2K" hashtag, a reference to the $2,000 average annual increase in middle-class taxes if nothing is done.
"Now's the time for us to work on what we all agreed to, which is let's keep middle class taxes low. That's what our economy needs, that's what the American people deserve, and if we get this part of it right, then a lot of the other issues surrounding deficit reduction in a fair and balanced and responsible way are going to be a whole lot easier, and if we get this wrong, the economy is going to go south, it's going to be much more difficult to balance our budgets and deal with our deficits because if the economy is not strong, that means more money is going out on things like unemployment insurance, and less money is coming in in terms of tax receipts, and it actually just makes our deficit worse," Obama said, adding he is hopeful something can be worked out by Christmas.
Obama again urged the House to approve a Senate-passed measure that extends tax cuts on income of less than $250,000 to give lawmakers time to revise the tax code and budget after the first of the year.
"Even the wealthiest Americans would still get a tax cut on the first $250,000 of their income. So it's not like folks who make more than $250,000 aren't getting a tax break, too," he said. "They are getting a tax break on the first $250,000 just like everybody else. Families and small businesses would, therefore, be able to enjoy some peace of mind heading into Christmas and heading into the new year.
"And it would give us more time than next year to work together on a comprehensive plan to bring down our deficits, to streamline our tax system, to do it in a balanced way, including asking the wealthiest Americans to pay a little more so we can invest in training, education, science, and research."
Obama is to travel to Hatfield, Pa., Friday to visit toymaker K'nex Brands, "a business that depends on middle-class consumers during the holiday season, and could be impacted if taxes go up on 98 percent of Americans at the end of the year," the White House said.
Obama also was to meet with 14 chief executives from big businesses.
Negotiations grew knottier Tuesday when several leading Democrats called on Obama to demand Republicans agree to raise the nation's $16.4 trillion debt limit as part of a fiscal deal.
"We would be somewhat foolish to work out something on stopping us from going over the cliff and then a month or six weeks later, the Republicans would pull the same game they did before," The Washington Post quoted Senate Majority Leader Harry Reid, D-Nev., as saying.
The "game" he referred to was the summer 2011 debt-ceiling negotiations.
Republican leaders denounced Obama's "campaign" as a public-relations ploy aimed at bypassing congressional leaders.
Senate Minority Leader Mitch McConnell, R-Ky., said the "time for campaigning is over."
He said Obama should focus on ensuring Democrats compromise over higher tax rates for the wealthy.
"If the president wants a solution to the challenges of the moment, the people he needs to be talking to are the members of his own party, so he can convince them of the need to act,'' McConnell said.