Obama announces new initiatives for middle class

WASHINGTON — Facing voter anger over mounting budget deficits, President Barack Obama will ask Congress to freeze spending for some domestic programs for three years beginning in 2011. Separately on Monday, Obama unveiled plans to help a middle class "under assault" pay its bills, save for retirement and care for kids and aging parents.

The spending freeze would apply to a relatively small portion of the federal budget, affecting $477 billion available for domestic agencies whose budgets are approved by Congress each year. Some could get increases; others would face cuts. Such programs got an almost 10 percent increase this year. The federal budget total was $3.5 trillion.

The three-year plan will be part of the budget Obama will submit Monday. He is expected to propose the freeze Wednesday night in his State of the Union address.

The Pentagon, veterans programs, foreign aid and the Homeland Security Department would be exempt from the freeze.

Obama's separate public comments previewed other topics in the State of the Union address.

The proposals he described won't create jobs, but he said they could "re-establish some of the security that's slipped away." His remarks aimed to lift the nation's dour mood and show he is in touch with the daily struggles of millions of people as resentment runs high about lost jobs and the economy.

The initiatives amount to a package of tax credits, spending expansions and new mandates on employers to encourage retirement savings by workers. Most will be in Obama's budget for the fiscal year starting Oct. 1.

Obama's address will outline his second-year agenda across a spectrum of issues, including tighter rules on Wall Street behavior and a push for financial discipline in Washington. He also is expected to touch on the controversial issue of gays in the military.

Among his economic ideas:

• Nearly doubling the tax credit that families making under $85,000 can receive for child care costs, with some help for families earning up to $115,000, too.

• Capping the size of periodic federal college loan repayments at 10 percent of borrowers' discretionary income to make payments more affordable.

• Increasing by $1.6 billion the money pumped into a federal fund to help working parents pay for child care, covering an estimated 235,000 additional children.

• Requiring employers who don't offer 401(k) retirement plans to offer direct-deposit IRAs for their employees, with exemptions for the smallest firms.

• Spending more than $100 million to help people care for their elderly parents and get support for themselves as well.

State of the

Union address

9 p.m. Wednesday, on all major networks and cable news networks.

Obama announces new initiatives for middle class 01/25/10 [Last modified: Monday, January 25, 2010 11:12pm]

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