At an event today, President Obama and Vice President Biden, Chair of the White House Task Force on Middle Class Families, will today discuss some items that will appear in the State of the Union address.
The proposals are aimed at helping middle class Americans, and include:
1. Increasing the Child and Dependent Care Tax Credit for middle class families making under $85,000 a year from 20% to 35% of qualifying expenses. The administration says that almost all eligible families making under $115,000 a year would see a larger credit. Families could claim up to $3,000 in expenses for one child or $6,000 for two children, and the maximum credit for a family with two children making $80,000 a year would increase by $900 from $1,200 to $2,100. The Obama administration will also provide a $1.6 billion increase in child care funding which it says will help an additional 235,000 children.
2. Capping student federal loan payments to 10 percent of the student’s income above a basic living allowance. The monthly payment for a single borrower earning $30,000 who owes $20,000 in loans would be $115 a month – as opposed to $228 a month under the standard 10-year repayment plan.
3. Requiring all employers to give workers an option of automatic workplace direct-deposit IRAs. Currently 78 million working Americans — roughly half the workforce – do not have employer-based retirement plans. The contributions will be voluntary and matched by the Savers Tax Credit for eligible families. The smallest firms would be exempt.
4. Expanding tax credits to match retirement savings by expanding and simplifying the Saver’s Credit to match 50 percent of the first $1,000 of contributions by families earning up to $65,000 and providing a partial credit to families earning up to $85,000.
5. Expanding support for families balancing work with caring for elderly relatives with a $102.5 million Caregiver Initiative adding $52.5 million in funding to Department of Health and Human Services caregiver support programs that provide temporary respite care, counseling, training, and referrals to critical services. The administration says the extra funding will allow nearly 200,000 additional caregivers to be served and 3 million more hours of respite care to be provided. It also adds $50 million to programs that provide transportation help, adult day care, and in-home services, such as aides to help seniors bathe and cook, help which eases the burden for family members and helps seniors stay in their homes.