Obama announces initiatives for middle class

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 $85,½½½; a $1.6 billion increase in federal funding for child care programs and a program to cap student loan payments at 1½ percent of income above "a basic living allowance."

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' 6½-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."