Capital Briefs: New IRA Proposed in Budget Package

would allow tax-free withdrawals after retirement. The new investment, dubbed the "American Dream IRA," allows working individuals and homemakers to make taxable $2,000 yearly contributions. The tax-free withdrawals would be allowed after age 59 and a half. Early withdrawals also would be allowed for first-time home purchases, medical expenses, unemployment, and college costs. The IRA proposal is part of a budget package prepared by the Senate Finance Committee and the House Ways and Means Committee. The panels also are proposing enhanced traditional IRAs. Income levels eligible for full $2,000 tax-deductible contributions would be increased to $5,000. For individuals, the income cap would be $85,000; for couples, $100,000. The IRA plans are included in a budget package that was expected to be approved by Congress Friday.