Obama to address voter fears in State of Union

WASHINGTON (Reuters) - President Barack Obama, concerned by voter anxiety over high unemployment, will use his State of the Union speech on Wednesday to reassure Americans worried about jobs and the economy, aides said.

White House spokesman Robert Gibbs said on Monday that Obama would talk about how to get the economy back onto a firmer footing, boost hiring, tackle the deficit and deliver financial regulation and healthcare reform.

“I think all of that goes to the type of economic anxiety that people felt in this country last week,” Gibbs told reporters. “Feeling like their jobs weren’t secure ... feeling like they were working longer and harder for less money.”

Obama’s first State of the Union speech at 9 p.m. EST on Wednesday (0200 GMT on Thursday) will give him a chance to set the tone and priorities for his second year in office.

His rhetoric has already taken a populist turn after the White House suffered a serious setback in an election for a U.S. Senate seat last Tuesday.

“Creating good sustainable jobs is the single most important thing that we can do to rebuild the middle class,” Obama said earlier in unveiling proposals to expand a child-care tax credit and encourage savings to demonstrate his concern for middle-class families.

A year into his presidency, Obama and his Democratic Party have witnessed an erosion of support among middle-class Americans who swept him into office. He has responded with a tougher line against Wall Street and excessive executive bonuses.

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Frustration with the 10 percent unemployment rate and wariness toward Obama’s plans to change the healthcare system helped set the stage for a shocking loss by Democrats last week in a Massachusetts Senate race.


Obama will seek to tap into that frustration as he addresses the nation on Wednesday.

“We ... 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,” Obama said.

“There are a variety of immediate steps we can take to do just that -- steps we’re poised to begin taking in the budget that I’ll put forward next week,” he said. Obama will unveil his proposed federal budget for fiscal 2011 on February 1.

The initiatives were developed by the White House Task Force on Middle Class Families, led by Vice President Joe Biden. The proposals would:

President Obama and Vice President Joseph Biden attend the meeting of the White House Task Force on Middle Class Families in the Eisenhower Executive Office Building, January 25, 2010. REUTERS/Larry Downing

* Require companies that do not offer retirement plans to enroll their employees in direct-deposit retirement accounts unless the workers opt out.

* Increase the “Savers Credit,” a tax credit for retirement savings, for families making up to $85,000.

* Change some of the rules for 401(k) employer-sponsored retirement savings accounts to make them more transparent.

* Increase the child tax credit rate to 35 percent of qualifying expenses from the current 20 percent for families making under $85,000 a year. Families making up to $115,000 would be eligible for some increase in the tax credit.

* Increase child care funding by $1.6 billion in 2011 to serve an additional 235,000 children.

* Boost government spending by $102.5 million for programs aimed at helping families who provide home care for an aging relative.

* Ease the burden for student loans by limiting a borrower’s payments to 10 percent of his or her income above a basic living allowance.

Editing by Eric Walsh