Obama seeks spending freeze, help for middle class

WASHINGTON — President Barack Obama will ask Congress to freeze spending for some domestic programs for three years beginning in 2011, administration officials said Monday, the same day 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 a $477 billion pot of money available for domestic agencies whose budgets are approved by Congress each year. Some of those agencies could get increases, others would have to face cuts; such programs got an almost 10 percent increase this year.

The three-year plan will be part of the budget Obama will submit Feb. 1, senior administration officials said, commenting on condition of anonymity to reveal private details.

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

The savings would be small at first, perhaps $10 billion to $15 billion, one official said. But over the coming decade, savings would add up to $250 billion.

It also would not affect a $154 billion jobs plan pending before Congress and backed by Obama, the officials said. One aide said that plan would be exempt because it would take effect this year, before the freeze.

The separate proposals to help the middle class that Obama previewed today will be unveiled in part in Wednesday’s State of the Union speech and in detail next week.

Republicans called Monday’s middle-class proposals a publicity stunt that would do nothing to create jobs.

“Americans are asking ‘where are the jobs?’ but none of the proposals outlined by the White House today would, in fact, create jobs,” said Rep. John Boehner, R-Ohio, his party’s leader in the House of Representatives. “The American people don’t need more photo-ops; they need new policies that create jobs.”

The White House maintained that its imperative still is to create jobs. Yet Obama said that squeezed families need help in other ways, too: paying for child care, helping out aging parents, saving for retirement, paying off college debt.

Among the president’s 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. Obama’s initiatives also include expanding and simplifying a tax credit that matches retirement savings, and making 401(k) rules easier to understand.

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