WASHINGTON — President Barack Obama on Monday offered help for people struggling to pay bills and care for their families, appealing to a middle-class he says has been "under assault for a long time."
In a partial preview of a State of the Union address that aims to answer voter angst about the economy and reconnect with the public, Obama outlined the series of proposals from the White House. The product of a middle class task force headed by Vice President Joe Biden, the proposals will also be included in Obama's budget request due to be submitted to Congress next week.
Among the initiatives: a doubling of the child care tax credit for families earning under $85,000; a $1.6 billion increase in federal funding for child care programs and a program to cap student loan payments at 10 percent of income above "a basic living allowance." The initiatives will be part of the president's proposed budget for fiscal year 2011.
His initiatives also include expanding tax credits to match retirement savings and increasing aid for families taking care of elderly relatives. That program would also require many employers to provide the option of a workplace-based retirement savings plan.
Obama is seeking to offer some attractive options to taxpayers, mindful of the painful implications of the loss of a traditionally Democratic Senate seat in Massachusetts to Republican Scott Brown. White House advisers see Wednesday's State of the Union speech as a key opportunity for Obama to recalibrate his message and reset his presidency after that stinging setback, which took away the Democrats' 60-vote supermajority in the Senate and put his main domestic agenda item, a health care overhaul, in doubt.
Obama and fellow Democrats are trying to regroup to stem more losses of congressional, gubernatorial and legislative seats in this fall's midterm elections. Obama's poll numbers are also off — primarily because of the slow economic recovery and double-digit unemployment.
"Too many Americans have known their own painful recessions long before any economists declared that there was a recession," Obama said in remarks to the task force, gathered around a horseshoe-shaped table.
The president said that creating new jobs and reducing unemployment is the "single-most important thing we can do to rebuild the middle class." ''I won't rest until we're doing just that," he said.
But, Obama said, "We also need to reverse the overall erosion in middle-class security, so that when this economy does come back, working Americans are free to pursue their dreams again."
The White House says the new proposals are aimed at just that — the "sandwich generation" that is now struggling to care for both children and parents. The theme fits into the planned economic message of Obama's prime-time address to the nation on Wednesday, which promises to provide a sharper focus on jobs and is likely to cover financial regulations, energy, education, immigration and a push to change the political tone in Washington.
Under the president's proposals, families making under $85,000 a year would see their child care tax credit nearly doubled. Families making under $115,000 would also see at least some increase in their tax credit as well. Obama will also call for the allocation of $100 million to assist families caring for aging relatives by providing help with transportation, adult day care and in-home aids.
The initiatives also focus on savings, requiring employers that don't offer work-based retirement plans to enroll their employees in a direct deposit retirement account, unless the employee opts out. The cost to employers would be offset by new tax credits, and the administration says the smallest firms would be exempt.
Obama will also call for caps on some student loans, limiting a borrower's payments to 10 percent of his or her income, and forgiving all remaining debt after 10 years of payment for those in public service work — and 20 years for all others.
AP White House Correspondent Jennifer Loven contributed to this report.
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