President Barack Obama and Vice President Joe Biden previewed some of the major themes in the presidents upcoming State of the Union address, including a proposal to increase some tax credits for middle-class families.
The two men spoke during a meeting Monday of the White Houses Middle Class Task Force. Biden outlined several policy initiatives for helping middle-class families, including nearly doubling the Child and Dependent Care Credit for families who earn less than $85,000 a year.
Since 2000, child care costs have grown significantly faster than inflation and twice as fast as the median income of families with children, said Biden. And that's why were asking Congress to nearly double the credit for middle-class families with incomes up to $85,000 and increase the credit for nearly every family making under $115,000.
The move would be accomplished by increasing their tax credit rate from 20 percent to 35 percent of qualifying expenses.
In addition, the administration plans to provide a $1.6 billion increase in child care funding in the budget it will present to Congress, the largest one-year increase in 20 years, to help an additional 235,000 children.
Obama and Biden also plan to simplify and expand the Savers Credit to provide a 50 percent match on the first $1,000 of retirement savings. If you put a thousand bucks into a retirement account, your government is going to add even more, another $500, said Biden. It's an incentive, but long term it saves the government a lot more money than the 500 hundred bucks put in, if in fact we find we have a generation thats able to care for themselves and not have to look to the government to provide some basic needs they need. This will not only help build up a nest egg for existing savers, but its going to encourage workers who currently have no retirement accounts to start to save.
Other proposals include limiting a students federal loan payments to 10 percent of his or her income, creating a system of automatic workplace IRAs by requiring all employers to provide an option for employees to enroll in a direct-deposit IRA, and expanding support for families who are balancing work while caring for elderly relatives by providing counseling, training, help with transportation, and temporary respite care to nearly 200,000 people.
None of these steps alone will solve all the challenges facing the middle class, said Obama. Joe understands that; so do I. So do all my members of the Cabinet and our economic team. But hopefully some of these steps will re-establish some of the security thats slipped away in recent years. Because 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.
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