UPDATE 3-Obama promotes retirement savings plan on State of Union road trip

Wed Jan 29, 2014 4:35pm EST

By Jeff Mason
    WEST MIFFLIN, Pa., Jan 29 (Reuters) - President Barack Obama
set in motion a plan to help middle-income Americans save for
retirement on Wednesday on a road trip to highlight themes from
a State of the Union speech devoted to narrowing the gap between
the rich and poor.
    At events at a U.S. Steel plant near Pittsburgh and earlier
at a Costco retail store in outside Washington, Obama made good
on his promise in Tuesday's speech to focus on reducing income
inequality - with or without the cooperation of Congress. 
    Obama signed a presidential order directing Treasury
Secretary Jack Lew to establish a government-backed investment
option called myRA that permits people with little to no savings
to set aside as little as $5 in payroll deductions.
    "If you worked hard all your life, you deserve a secure
retirement," Obama told about 1,500 plant workers.
    The program seeks to address the problem that Americans 
have not made proper plans to set aside money for their old age
and have neither pensions nor a 401(k) retirement savings plan.
    The myRA plan is similar to the tax-advantageous Roth
Individual Retirement Account, but with investment holdings
backed by the U.S. government like savings bonds. The accounts
would be available to households earning no more than $191,000 a
year.    
    Some Republicans expressed concerns about the go-it-alone
strategy Obama adopted on Tuesday night. 
    Asked at a Wall Street Journal breakfast about the
president's plans to make changes through executive orders when
stymied by Congress, Republican Senator Marco Rubio said they
were "deeply counterproductive to making progress." 
    "All presidents get frustrated with the congressional
branch. This president seems to have an extra frustration with
it and reacts to it through unilateral actions that I think are
counterproductive and in my opinion in some instances borderline
unconstitutional," said Rubio, a potential 2016 presidential
candidate.
    At the Costco store in Lanham, Md., flanked by boxes of
paper towels and garbage bags, Obama said that in coming weeks
he would sign an executive order raising to $10.10 an hour the
minimum wage for federal contract workers. But he said Congress
must act to raise it for millions of other American workers. The
current federal minimum wage is $7.25 an hour.
    "If you work hard, you should be able to pay your rent, buy
your groceries, look after your kids," Obama said at the big-box
retail store, whose wage practices he had praised. "If you put
in a hard day's work you deserve decent pay for it."
    
    RAISING THE MINIMUM WAGE
    Obama noted that many state governors had already taken
steps to raise the minimum wage in their states.
    "While Congress decides whether it's going to raise the
minimum wage or not, people outside of Washington are not
waiting, and I'm not either," he said.
    Obama's travel had a political motive. He is trying to help
Democrats win seats in November's congressional elections by
focusing on a popular theme that touches on the economy and
income inequality.

    Obama's action on the minimum wage will affect only a
relatively small number of workers, but it drew praise from
members of his Democratic Party who were discouraged by the
flawed roll-out of his signature healthcare reform law last
fall.
    "The increase in the minimum wage is a very powerful
message. It resonates across the country," said Senator Ed
Markey of Massachusetts. "I think this will really give some
wind to this year's Obama agenda."
    Republicans oppose a broad increase in the minimum wage,
saying it could cause employers to cut jobs and harm the
economy. 
    The president's determination to resort more to executive
action follows a year in which his policy proposals failed to
gain traction in a divided Congress, in which Republicans
control the House of Representatives. 
    Vice President Joe Biden, however, said in television
interviews on Wednesday that the president did want to work with
Congress and was confident of cooperation in some key areas,
including reform of immigration policy.
    House Republicans plan to discuss immigration during a
three-day retreat in Maryland starting on Wednesday but
conservatives in the party were wary about moving forward on the
issue.  
    "We're ready to work with the Congress," Biden told NBC's
"Today" program. The low public approval rate for the
legislature, many of whose members face elections in November,
would help motivate them to action, he said. 
    Democrats are trying to reinforce the image of Obama, whose
poll numbers are low, as a hero of the middle class, much as he
presented himself during the 2008 and 2012 presidential
campaigns.
    "Raising the minimum wage is not just a matter of fairness
or a means of combating inequality; it is also needed to
jumpstart our economy," the Center for American Progress, a
liberal-leaning Washington think tank, said in a statement.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article