Obama Plans Mealy-Mouthed Middle Class Relief

It seems that Obama is finally getting around to offering something to the middle class. Too bad it sounds like so very little.

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.

This seems like a laudable credit if you have children under 12. If not then you can pretty much ignore this increase.

• Capping the size of periodic federal college loan repayments at 10 percent of borrowers' discretionary income to make payments more affordable.

I guess you can afford the payments but it will be over a longer period of time. $300 a month for 20 years and $600 a month for 10 years amounts to the same thing. Too bad this government cap will probably just extend the life of your loan. Also I wonder what happens if your discretionary income drops does your loan go out to even more years?

• 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.

This seems like a good enough goal. Hopefully the $6808 per child will not be a big waste of money.

• Requiring employers who don't offer 401(k) retirement plans to offer direct-deposit IRAs for their employees, with exemptions for the smallest firms.

Well, this is a good idea from an investors perspective because you have suddenly signed up everyone working for a small business for mutual funds. This should be great for the Vanguard, T.Rowe Price, Fidelity and any other mutual funds companies out there.

It would be bad for small businesses who can't afford to hire new workers due to the added cost of offering 401Ks. I do however see Fidelity or whomever jump into the small business 401K administrator role and offer low cost, hands-off plans. This is a lucrative new field that has just opened up a ton of new investment capital for mutual fund operators.

Also maybe the more entrants into the investment classes will curb some of Obama's propencity for shooting off his mouth about taxing fat cat bankers which tanks the market. The idea that he will be hurting millions of 401K owners will make him think twice.

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

$100 million sounds like almost nothing and probably amounts to like $1.50 per person or something minuscule like that. It smacks of the call to cut a few million from his cabinet that amounted to reducing the deficit by like .0003% or something like that.

Somehow I was expecting more sweeping plans for the middle class like tax relief or maybe a cut in payroll taxes or something. Instead this stuff sounds like some picking on the surface when what the middle class needs is jobs, jobs, and more jobs.