Obama Announces Middle Class Incentives

President Obama previewed Monday some of the items from his upcoming budget, proposing to double the child care tax credit for families earning up to $85,000 a year and add another $1.6 billion in federal funding for child care programs. The appeal to middle class families is expected to be a centerpiece of his State of the Union speech this week.

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From NPR News, this is ALL THINGS CONSIDERED. Im Madeleine Brand in California.

ROBERT SIEGEL, host:

And Im Robert Siegel in Washington.

President Obama set his sights today on the middle class. He offered several small scale proposals aimed at helping struggling middle class families pay for childcare, college and retirement. Aides say that will be a key theme for Mr. Obama when he delivers his State of the Union address on Wednesday.

NPRs Scott Horsley reports.

SCOTT HORSLEY: Middle class anxiety was one of the factors that helped propel Barack Obama into the White House last year and gave Democrats their big majorities in the House and Senate. Now that same anxiety is working against the president as he tries to combat a double digit unemployment rate.

President BARACK OBAMA: Creating good sustainable jobs is the single most important thing we can do to rebuild the middle class. And I wont rest until we're doing just that. But we also need to reverse the overall erosion in middle-class security.

HORSLEY: In his upcoming budget, Mr. Obama will adopt a series of proposals from a middle class task force led by Vice President Biden. He has spent the last year studying problems like the rising cost of college and the shrinking manufacturing base. Mr. Obama says all these problems date back long before the latest economic down turn.

Pres. OBAMA: Too many Americans have known their own painful recessions long before any economist declared that there was a recession. Weve just come through what was one of the most difficult decades the middle class has ever faced a decade in which median income fell and our economy lost about as many jobs as it gained.

HORSLEY: By addressing those challenges in his State of the Union speech this week, Mr. Obama hopes to convince anxious voters that he understands what they're going through and remind them that the countrys economic problems didnt begin when he or congressional Democrats took control of the government. The specific proposals offered by the president today include larger tax credits to help middle-class families pay for childcare and additional support for those who are caring for elderly relatives.

Health and Human Services Secretary Kathleen Sebelius says the health is targeted to the so-called sandwich generation, some 12 million of whom are caring for children and parents at the same time.

Secretary KATHLEEN SEBELIUS (Department of Health and Human Services): As a working mom, whos been in the work for several time when my children were growing up and the daughter of an 88-year-old father, Im very sensitive to both of these issues and struggles. And I think health and assistance in those two areas is something that really does take a huge strain off families who are trying to be good parents and good workers at the same time.

HORSLEY: Another measure outlined by the president today would make it easier for college graduates to pay off their student loans. Payments would be capped at 10 percent of a graduates discretionary income and any remaining debt would be forgiven after 20 years or just 10 if a graduate goes into public service. The administration also hopes to encourage more retirement savings by offering a partial match to savers making up to $85,000, a year.

In addition, Vice President Biden wants to require employers to automatically enroll workers in a retirement savings account, unless the worker decides to opt out.

Vice President JOE BIDEN: Its a simple proposition when you do that, people, if youre automatically enrolled, they save a great deal more.

HORSLEY: None of these proposals is as sweeping or ambitious as overhauling health care or building a new clean energy economy. Mr. Obama acknowledged these small ticket items wont solve all the problems of the middle class. But he said he hopes they would help them at least reclaim some of the economic security that slipped away in recent years.

Pres. OBAMA: In the end, thats how Joe and I measure progress not by how the markets are doing, but by how the American people are doing. Its about whether they see some progress in their own lives.

HORSLEY: And thats how many Americans will ultimately judge this president.

Scott Horsley, NPR News, the White House.

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