Middle Class Economics for the 21st Century - Helping Working Families Get Ahead

Over the past six years, we’ve rescued and begun to rebuild our economy on a new foundation.  Middle class economics has begun to work.  Now we have to build on this progress to raise wages and incomes and to strengthen the standing of working families in a new economy. 

Middle class economics for the 21^st century provides working families with the support they need to make ends meet right now—to reward hard work so paychecks go further to cover the costs of health care, child care, a home, and a secure retirement in the future.  It empowers every working American with the education and training they need to earn higher wages.  And it places a relentless focus on making America the place where businesses decide to innovate, grow, and create good, high-paying jobs. The President will help America accomplish these goals by working with Congress when he can and acting on his own when he must. In everything we do, America is at its best when we move forward together.

Making the Paychecks of Working Families Go Further

• Eliminating the trust fund loophole and using the savings to responsibly pay for measures to help middle class families get ahead
• Cutting taxes with a $3,000 credit per young child to make child care more available and affordable, while creating a new second earner tax credit for working families
• Partnering with states to adopt paid leave and ensure every American can earn paid sick days so they can take time to care for themselves and their family
• Increasing the minimum wage, so some of the hardest working Americans get a raise
• Making a home more affordable for responsible middle class families by cutting mortgage premiums

Preparing Hardworking Americans to Earn Higher Wages

• Making two years of community college free for responsible students, so every American has access to at least two more years of high-quality schooling
• Reducing the burden of student loan debt and expanding a middle class tax cut for college so hardworking students aren’t priced out of an education
• Partnering with businesses to create more on-the-job training and apprenticeship opportunities so workers can learn the skills they need for better, higher-paying jobs and earn wages while they are training
• Expanding opportunities for working Americans to make career transitions into fast-growing, higher-paying fields where employers have good-paying jobs to fill 

Keeping Good, High-Paying Jobs in America

• Fixing our broken business tax code, repairing crumbling roads and bridges, and modernizing our infrastructure so businesses create good jobs here at home
• Promoting American jobs and American workers by signing new trade deals so the United States, not China, sets the fair wage, safe workplace, and clean environment rules of trade
• Jumpstarting medical innovation to deliver the right treatment to the right patient
• Promoting American leadership in clean energy technologies, as well as continuing to invest in advanced manufacturing to ensure America’s manufacturing sector continues to lead the world for years to come
•  Passing comprehensive immigration reform that strengthens the American workforce
• Ensuring entrepreneurs and small business owners have the tools they need to grow their businesses and create jobs

Making Paychecks of Working Families Go Further

Ensuring All Working Families Have Access to High-Quality, Affordable Child Care: Our current tax code for child care is unnecessarily complex and insufficient to cover the costs most families face. The President’s proposal would streamline child care tax benefits and triple the maximum child care credit for middle class families with young children, increasing it to $3,000 per child. This would benefit 5.1 million families, helping them cover child care costs for 6.7 million children, including 3.5 million children under 5. The President’s child care tax proposal will complement substantial additional new investments in the President’s Budget to improve child care quality, access, and affordability.

Making High-Quality Preschool Available to Every Four-Year Old: Since the President first called for every four-year-old across the Nation to have access to high-quality preschool programs, Congress has invested $500 million over two years, 34 states have invested over $1 billion, and philanthropic and corporate partners have invested over $300 million in preschool and early education. The President’s proposal would establish a Federal-State partnership to provide all low- and moderate-income four-year-olds with high-quality preschool, while providing States with incentives to expand these programs to reach additional children and to put in place full-day kindergarten policies. The proposal is paid for through an increase in tobacco taxes that will help reduce youth smoking and save lives. The President’s plan for early childhood would also continue to raise the bar in Head Start by investing in teacher quality and ensuring all children in the program have access to a full year of Head Start; expanding Early Head Start-Child Care Partnerships; and investing in proven voluntary home visiting programs for new parents.

Cutting Taxes for Middle Class Families When Both Spouses Work: Two-earner couples can face high penalties for working. When both spouses work, the family incurs additional costs in the form of commuting costs, professional expenses, child care, and, increasingly, elder care. Building on Congressional proposals from members of both parties, the President is proposing to address these challenges with a new second earner credit of up to $500 that recognizes the additional costs faced by families in which both spouses work. A total of 24 million couples would benefit from this proposal.

Eliminating the Trust Fund Loophole and Using the Savings to Invest in the Middle Class: Rather than make it easier for middle class families to make ends meet, our tax system has changed over time in ways that make it easier for the wealthy to avoid paying their fair share. The President’s proposal would close the single largest capital gains loophole – the trust fund loophole, which lets hundreds of billions of dollars escape taxation each year – to ensure the wealthiest Americans pay their fair share on inherited assets. The proposal would also raise the top combined capital gains and dividend rate to 28 percent – the rate under President Reagan. Ninety-nine percent of the impact of this proposal would be on the top 1 percent, and more than 80 percent on the top 0.1 percent (those with incomes over $2 million).

Strengthening Paid Leave Policies for Working Families: When 43 million private-sector workers are without any paid sick leave, too many workers go to work sick. Too many parents must choose between taking an unpaid day off work—losing much-needed income and potentially threatening his or her job—and sending a child to school who should be home in bed.  The President believes that Congress should pass the Healthy Families Act to allow millions of working Americans to earn up to seven days per year of paid sick time, and that states and localities should waste no time in passing their own laws allowing workers to earn sick leave.  In addition, while the Family and Medical Leave Act allows many work­ers to take job-protected unpaid time off to care for a new baby or sick child or to tend to their own health during a serious illness, millions of families cannot afford to use unpaid leave. The President is proposing more than $2 billion in new funds to encourage states to develop paid family and medical leave programs, following the example of California, New Jersey, and Rhode Island. He is also following the lead of other large employers by ensuring that Federal employees with a new child are able to take time off, and he is calling on Congress to pass legislation giving Federal employees six weeks of paid parental leave. 

Increasing the Minimum Wage to Give Americans a Raise: Since the President made his initial call to raise the minimum wage in the 2013 State of the Union, 17 states and the District of Columbia have taken action to raise wages – which will benefit 7 million workers. Cities and business across the country have also acted to raise wages. The President is calling on states, cities, and businesses to follow that lead and help raise wages for millions of additional workers – and for Congress to finally act so that everyone who works full time can support their families.  

Making Owning a Home More Affordable for Middle Class Families by Cutting Mortgage Premiums: While the housing market is now on firmer footing – with rising home values, falling foreclosures, and fewer families underwater – too many creditworthy and qualified families who want to purchase a home are shut out of homeownership opportunities by today’s tight lending market. In response, the President announced a major new step that his Administration is taking to make mortgages more affordable and accessible for creditworthy families. The Federal Housing Administration (FHA) will reduce annual mortgage insurance premiums by 0.5 percentage point from 1.35 percent to 0.85 percent. For the typical first-time homebuyer, this reduction will translate into a $900 reduction in their annual mortgage payment. Existing homeowners who refinance into an FHA mortgage will see similar reductions to their mortgage payments as well. In total, this action will help millions of families save billions of dollars in mortgage payments in the coming years, helping to support the housing market recovery. And in the coming months, the Administration will take additional steps to cut red tape and clarify lending standards to build on these measures.

Increasing Penalties for Companies Who Pay Their Workers Below the Minimum Wage and Deny Them the Overtime Pay They Have Earned: Some of the penalties against employers who fail to pay their workers a minimum wage or overtime pay are not strong enough to deter violations – some studies have even found that it is cheaper for firms to not comply with minimum wage laws, even when firms know they will be caught. In response, the President will propose that the Department of Labor strengthen penalties against employers who jeopardize workers’ health, safety, wages, right to family and medical leave, and retirement security. While increasing the penalties for those who violate overtime rules is essential to ensure that workers receive this basic guarantee, overtime rules have eroded over the years and need to be strengthened so that they cover more workers. Millions of salaried workers have been left without the protections of overtime and the minimum wage guarantees. For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, without receiving a dime of overtime pay. It is even possible for employers to pay salaried workers less than the minimum wage per hour. To address the issue, the Secretary of Labor will put in place new regulations giving millions more workers the right to overtime pay.

Making it Easy and Automatic for Workers to Save for Retirement: Americans face a daunting array of choices when it comes to preparing for retirement. Social Security is and must remain a rock-solid, guaranteed progressive benefit that every American can rely on, but too many Americans reach their golden years without enough to supplement their Social Security and enjoy a secure retirement after a lifetime of hard work. The President proposes to provide additional tax relief to small businesses who newly offer a retirement plan, such as a 401(k), or who start automatically enrolling workers in their plan. For those employers who don’t offer plans, the President’s proposal requires them to offer their workers a simple, affordable, and automatic IRA savings vehicle, and provides tax credits to small businesses to cover the minimal administrative costs. Together the President’s retirement proposals would give 30 million additional workers access to a workplace savings opportunity and would complement the Administration’s efforts over the past year to make saving for retirement easier by creating the simple, risk-free, and no-fee “myRA” starter savings vehicle. The President’s reforms to make the system more robust for middle class workers would be paid for by closing retirement tax loopholes for the wealthy.

Expanding Tax Credits that Reward Work: The Earned Income Tax Credit (EITC) is among the nation’s most effective tools for reducing poverty and encouraging people to enter the workforce. However, low-wage workers without children and non-custodial parents miss out on the anti-poverty and employment effects of the EITC because the credit available to them is small and phases out at very low incomes. Last year, the President and prominent Republicans proposed to address these problems by significantly expanding the EITC for workers without qualifying children. The President continues to support the childless worker EITC expansion, which would reduce poverty and hardship for 13.2 million low-income workers struggling to make ends meet while promoting employment. The President also continues to propose making permanent improvements to the EITC and CTC that augment wages for 16 million families with 29 million children each year, but are currently scheduled to expire at the end of 2017.

Ensuring More Americans Have Affordable, Quality Healthcare: Since long before the President took office, rising health care costs made it harder and harder for families to make ends meet. That’s why in March of 2010, President Obama signed the Affordable Care Act into law, putting in place comprehensive reforms that improve access to affordable health coverage for everyone, improve quality, protect consumers from abusive insurance company practices, and control health care cost growth. For the millions of Americans who get health insurance through an employer plan or a program like Medicare, the law includes significant protections that ensure consumers and their doctors – not insurance companies – are in charge. We’ve reduced the share of uninsured Americans by about one quarter, as about ten million gained the financial security of health insurance in the past year alone. And since the Affordable Care Act became law, health care prices have risen at their lowest rates in nearly 50 years. Had health insurance premiums kept growing at the rate they did in the last decade, the average annual premium for a family with an employer plan would be $1,800 higher than it is today.

Protecting the Financial Well-Being of Hard Working Families and Businesses: Excessive financial risk taking and regulatory gaps in the run up to the crisis resulted in the worst recession in more than 70 years, left millions of Americans unemployed, and erased trillions of dollars of families’ savings. The President and his Administration are determined to prevent this kind of harm from happening again. The Dodd-Frank Wall Street Reform and Consumer Protection Act put in place a range of important reforms that protect the financial well-being of families and help preserve the ability of Main Street businesses to grow through stable funding sources. For example, the law created a new Consumer Financial Protection Bureau dedicated solely to protecting consumers in the financial marketplace – a cop on the beat on their behalf. Given the critical importance of protecting consumers and preventing recklessness in the financial system from harming the American economy, the President will defend these crucial reforms from attacks that benefit narrow special interests and unnecessarily put middle class families at risk.  The President is also calling on Congress to complete the last major unfinished piece of Wall Street reform by passing housing finance reform legislation to preserve broad access at affordable rates and a stable system for future generations.

Preparing Hardworking Americans to Earn Higher Wages

Making Two Years of Community College Free for Responsible Students, So Every Child in America Has Access to At Least Two Years of College: In the lead-up to the State of the Union, the President proposed an ambitious new effort to make two years of college free for responsible students.  The proposal, based on similar efforts in Tennessee and Chicago, would make two years of college as free and universal as high school, reduce the cost of a four-year degree, and improve the quality of community colleges that enroll almost 40 percent of all undergraduate college students today. The program will eliminate tuition at high-quality community college programs (either academic programs that fully transfer to local public four-year colleges and universities or occupational programs with good graduation rates and employment outcomes) for responsible students who earn good grades and stay on track to graduation.  After States achieve tuition-free community college with their grants, they can spend the remainder on expanding quality community college offerings, improving affordability at four-year public universities, and improving college readiness, through outreach and early intervention. The President’s proposal also includes a new American Technical Training Fund that will help community colleges and other institutions develop programs that have strong employer partnerships and include work-based learning opportunities for students to lead to better employment outcomes.

Preparing all Students for Success in College and Careers: Since the President took office, the Administration has worked with States and school districts toward the goal of all children meeting rigorous college- and career-ready standards.  Forty-eight states and the District of Columbia have raised standards for learning in their schools and are supporting the hard work of teachers to enable their students to succeed.  The signs of progress are clear: the high school graduation rate is the highest on record, and students are making academic gains. Yet we have a long way to go to ensure that all students, particularly those who are the most disadvantaged, are ready to compete in a global economy.  That’s why the President is calling for new investments and innovation that will expand preschool, provide more help to disadvantaged students and the schools that serve them, better prepare and support teachers, and transform our high schools so that our graduates are prepared for college and career. In the coming days, the President will announce his plans to help hundreds of communities across America launch Next-Generation High Schools that will be laboratories for cutting-edge teaching and learning in science, technology, engineering, and math (STEM), with a focus on preparing many more women and students of color. Building on the tenets of high school reform that the President has put forward and championed, the Administration will also host a Summit on Next-Generation High Schools later in the year.

Simplifying Education Tax Benefits for All Students and Families: While the creation of the American Opportunity Tax Credit (AOTC) in 2009 made college more affordable for millions of students and their families, our system of tax incentives for higher education is complex, and families are sometimes unable to take full advantage of the benefits. Building on bipartisan reform proposals, the President’s education tax reform plan would simplify, consolidate, and better target tax-based financial aid. The President’s plan would cut taxes for 8.5 million families and students, simplify taxes for the more than 25 million families and students that claim education tax benefits, and provide students working toward a college degree with up to $2,500 of assistance each year for five years. These education tax reforms would complement the President’s other proposals to make college more affordable, including continuing historic increases in the Pell scholarship program and making a quality community college education free for responsible students.

Simplifying Student Aid Forms So More Students Take Advantage of Financial Aid: The current Free Application for Federal Student Aid (FAFSA) requires some applicants to complete over 100 questions to determine their eligibility for Federal student aid.  The complexity of the system discourages many eligible students from applying for aid:  more than 1 million students who are likely eligible for a Pell grant fail to complete the application.  The President is calling for elimination of 27 of the most burdensome and difficult-to-verify questions, including questions about assets that penalize savings and untaxed veterans benefits, child support, and clergy pay.  The result would be a simple online application that asks about the student’s address, parents’ income, college choices, and certain other, easy-to-answer questions.

Partnering with Industry to Create More Apprenticeship and On-The-Job Training Opportunities So Workers Can Learn the Skills They Need for a Better, Higher-Paying Job: Despite the large and growing demand for talent to fill well-paying jobs in fields like information technology, advanced manufacturing and health care, too many workers lack a clear path to a better job and middle class career. In response to the President’s call to make sure Federal job training is providing workers with the skills they need to secure good jobs that are ready to be filled, a review led by the Vice President resulted in a job-driven checklist of “what works” in job training that is being applied to Federal programs – requiring greater engagement with employers, expanded on-the-job training, and increased use of data to achieve better employment outcomes. The Administration has already awarded over $1 billion in competitive grants in 2014 to industry and education partnerships that applied this checklist, including over $300 million awarded to partnerships to train and hire for in-demand information technology jobs.

In particular, the President has taken action to expand access to apprenticeships, the gold-standard of investments to help workers advance into good, middle class jobs. Working with states, employers, and unions, Administration initiatives supported the country’s largest increase in registered apprenticeships in nearly a decade, and the President is committed to doubling down to build on and accelerate that expansion this year by aligning Federal investments with this proven path to the middle class and calling on more employers to expand apprenticeships.

Now, the President is also calling on employers to adopt or expand additional measures to help front-line workers gain the training and credentials to advance into better paying jobs - including paying for college education, offering on-the-job training for career progression, and increasing access to technology-enabled learning tools. Adopting best practices such as these can also improve employee retention, engagement, motivation, and productivity.  To that end, the White House will convene employers, foundations, educators, unions, non-profits, and others who are equipping front-line workers with the skills they need to advance into better paying jobs and punch their tickets to the middle class.

Partnering with Industry and Communities to Expand Opportunities for Americans to Transition into Well-Paying Jobs in Information Technology and Other Growing Fields: The President is calling on leaders in business and technology to work together with American communities to turn the half a million jobs in information technology open today in the United States into a near-term opportunity to grow our middle class. The Administration has already begun to work with cities, states, and rural communities across the country, as they initiate partnerships with their businesses, educators, innovators, and community leaders to give anyone willing to put in the work and able to master the skills the chance to get an in-demand tech job.  In the coming months, the White House will bring together communities that are taking these new actions, along with leaders in technology, business, workforce, education, and philanthropy committed to support their efforts with new tools and resources.

These initiatives build on the effort the President undertook to develop best practices on recruiting and hiring the long-term unemployed, which nearly 300 businesses signed onto. Many businesses like Frontier Communications, US Bank, Wells Fargo, CVS, and Sodexo have taken steps to improve their recruitment and hiring of the long-term unemployed, which have yielded results. Deloitte Consulting, in collaboration with the Rockefeller Foundation, released a handbook for employers to help more businesses take steps to get the long-term unemployed back to work. Over the past year, long-term unemployment has fallen by 1.2 million, representing two-thirds of the overall drop in unemployment.

Keeping Good, High-Paying Jobs in America

Fixing our Broken Tax Code, Repairing Crumbling Roads and Bridges, and Modernizing our Infrastructure So Businesses Create Good Jobs Here at Home: Transportation is a critical engine of the nation’s economy, allowing Americans to travel safely and conveniently, and enabling our businesses to move goods to market at competitive prices. The President has proposed the GROW AMERICA Act to renew our transportation infrastructure, which would grow our investments in roads, bridges and transit systems by more than a third, create tens of thousands of new jobs, and lay the foundations for long-term economic growth. The GROW AMERICA Act will provide States and local governments with the certainty they need to effectively plan and start construction on projects, enabling more of the transformative investments our nation needs. It will also create ladders of opportunity to the middle class, improve the nation’s freight system, and encourage innovation in transportation finance, transportation, and project delivery.

The President’s plan is financed by reinvesting the transition revenue from pro-growth business tax reform that would help create jobs and spur investment, while eliminating loopholes that let companies avoid paying their fair share. Specifically, the President’s framework for business tax reform includes cutting the corporate tax rate and broadening the tax base; improving incentives for research and clean energy; cutting and simplifying taxes for small business; and reforming the international tax system.

But the President isn’t waiting for Congress to act.  The Obama Administration’s Build America Investment initiative has taken a series of new steps by Federal agencies to support state and local governments’ efforts to access Federal financing programs, structure public-private collaboration, and attract private investment to build and improve roads, bridges, ports, broadband, and water systems in metropolitan and rural areas in ways that boost economic growth and resilience, while protecting the interests of taxpayers and workers.

Promoting American Jobs and American Workers by Signing New Trade Deals So the United States, not China, Sets the Fair Wage, Safe Workplace, and Clean Environment Rules of Trade: President Obama is committed to a trade agenda that provides new opportunities for workers and supports economic growth by opening markets, enforcing high standards in our agreements, and leveling the playing field for our workers.  The Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (T-TIP), and other negotiations offer new opportunities to advance this agenda, consistent with American interests and American values, including putting labor and environmental protections at the core of trade policy while creating jobs and protecting and promoting innovation. The President will call on Congress to work with him to secure approval of bipartisan trade promotion legislation – building on the 80 year bipartisan history of Democrats and Republicans working together to promote American exports and create jobs.  As we work toward new trade deals that will expand markets for American goods and services, we will also work to ensure that the strong existing rules governing trade are enforced.  That’s why the President created an Interagency Trade Enforcement Center to bring all of the resources of government together to break down foreign barriers and hold our trading partners accountable.   The Obama Administration has brought 18 cases before the World Trade Organization, more than any other country, and we have prevailed in every case that has been decided.

Additionally, the Administration’s SelectUSA program will continue to work – in partnership with state and local officials – to bring job-creating investment to the United States. The President also believes we must help American small businesses compete in overseas markets, and reauthorization of the Export-Import Bank will create jobs and open opportunities.

Investing in R&D, in Key Areas from Precision Medicine to the BRAIN Initiative: America's long-term economic competitiveness and growth depend on robust investments in research and development (R&D), which provide the foundation needed to further grow the economy. The President is calling for a major increase in R&D investments, including precision medicine, combatting antibiotic resistance, and the President’s signature BRAIN Initiative. The President’s proposal would invest in precision medicine, an innovative field that provides healthcare professionals with tools, knowledge, and treatments to tailor care to a person’s unique characteristics – such as their genetic makeup. Recent advances in genomics and digital data have produced powerful new discoveries about health and disease that have made it possible to design highly effective, targeted treatments for cancer and other diseases. The President’s proposal will engage patients and healthcare providers in delivering this new era of medicine. To help address the global threat of infectious disease created by rampant spread of antibiotic-resistant bacteria, the President also proposes to nearly double the Federal investment in antibiotic discovery. The President’s proposal also continues to invest in Alzheimer’s research and the multi-agency BRAIN Initiative. 

Simplifying Tax Filing for Small Business: At least 75 percent of regulatory compliance hours for small businesses have to do with tax compliance, and about 60 percent of small businesses’ tax compliance costs arise from complex rules around measuring income. For example, today’s rules require many small businesses to separately track and compute depreciation, amortization schedules, inventory, capitalized expenditures, and other items that require special accounting for taxes. Exemptions that let the smallest businesses avoid these complexities have not been comprehensively updated for nearly 30 years. The President will put forward a proposal to dramatically simplify tax filing for the vast majority of small businesses, letting them pay taxes based on their bank statement.

Tapping America’s Full Entrepreneurial Potential: The President will continue to take steps – working with cities and states – to cut red tape and make it easier for entrepreneurs to get what they need to start and grow new businesses. The President will also challenge the private and non-profit sectors to recruit more women, underrepresented minorities, and entrepreneurs from around the country to launch and scale innovative companies. The Administration will also build on work that the First Lady and the Department of Defense have undertaken for military spouses to reduce occupational licensing barriers that keep people from doing jobs they have the skills to do by requiring unnecessary training or high fees.

Positioning the United States to Lead in Manufacturing: After a decade of decline, the manufacturing sector is adding jobs for the first time since the 1990s and poised for growth in the years ahead. The President will take steps to build on recent bipartisan legislation and the eight manufacturing institutes launched to date to complete 15 institutes by the end of his term and put us on pace for 45 institutes over a  decade; equip small and medium manufacturers with the capabilities and access to technologies they need to improve their innovation and productivity; and, through a new $10 billion public-private American Made Scale-Up Fund for manufacturing start-ups, ensure that what is invented in America can be made in America.

Ending Manufactured Crises and Investing in America: The President will call for the end of manufactured crises like government shutdowns, and call for investing in the things that have made America great for generations – strengthening our economy, improving the education and skills of our workforce, accelerating scientific discovery, bolstering manufacturing, and keeping our nation safe. The President's Budget will outline how to end sequester and pay for these investments by cutting ineffective spending and closing tax loopholes.

Building on Net Neutrality to Increase Access and Reduce Cost for Broadband: Affordable, fast broadband is crucial to the future of our economy and nation. That’s why in November, the President outlined his plan to ensure the Internet economy remains open to new competition and innovation by safeguarding net neutrality — which, at its core, will help ensure no one company can act as a gatekeeper to digital content. To that end, communities around the country are refusing to settle for subpar service that can make it hard to keep business local and attract new entrepreneurs.  As a result, communities like Lafayette, LA, Chattanooga, TN, and Kansas City, MO have broadband almost one hundred times faster than the national average.  To help more communities do the same, and ensure a level playing field for all competitors, in the lead-up to the State of the Union the President called to end laws that harm competition, expand the national movement of local leadership for better broadband, unveil new loan opportunities for rural providers, remove regulatory barriers, and improve investment incentives.

Moving America Forward Together

Fixing the Broken Immigration System through Comprehensive Legislation: President Obama continues to urge Congress to fix our broken immigration system by strengthening our border security, holding employers accountable, creating an earned path to citizenship so that undocumented immigrants can play by the same rules as everyone else, and modernizing our legal immigration system to boost our economy and reunite families. After waiting over 500 days for the House to act on commonsense, comprehensive immigration reform, in November the President acted within his legal authority to help secure the border, hold millions of undocumented immigrants accountable, and ensure that everyone plays by the same rules and pays their fair share of taxes.  These executive actions crack down on illegal immigration at the border, prioritize deporting felons not families, and require certain undocumented immigrants to pass national security and criminal background checks in order to request temporary relief allowing them to stay in the United States without fear of deportation. According to an analysis by the Council of Economic Advisers, these actions would raise average wages for US-born workers by $170 in ten years. As the President acts, he’ll continue to urge Congress to work with him on a comprehensive, bipartisan bill, but will not allow ideological fights to roll back the progress we’ve made.

Reforming Our Criminal Justice System: At a time when the crime rate and the incarceration rate are coming down together for the first time in 40 years, Democrats and Republicans are coming together around reforms that will reduce crime, address disparities, build trust in our communities, and reduce the staggering costs of our prison system – all at the same time. The President is committed to doing what he can to work with bipartisan partners in Congress to pass legislation this year reforming sentencing for nonviolent drug offenders, reducing recidivism, and promoting juvenile justice.

Building Trust Between Communities and Law Enforcement: Recent events around the country have highlighted the importance of trust between law enforcement agencies and the people they protect and serve. Recognizing that the need to bridge the trust gap is essential to the stability of our communities, the integrity of our criminal justice system, and the safe and effective delivery of policing services, President Obama established the Task Force on 21st Century Policing.  The purpose of the Task Force is to build on the extensive research currently being conducted by the Department of Justice; examine, among other issues, how to promote effective crime reduction while building public trust; and prepare a report and recommendations within 90 days of its creation. The President also proposed a three-year $263 million investment package that will increase use of body-worn cameras, expand training for law enforcement agencies (LEAs), add more resources for police department reform, and multiply the number of cities where DOJ facilitates community and local LEA engagement.  Finally, the President recently signed an Executive Order creating an interagency Law Enforcement Equipment Working Group that will provide specific recommendations to the President regarding Federal funds and programs that provide certain equipment to state and local LEAs.

Leading the World to Take On the Threat of Climate Change and Win the Clean Energy Economy: In America, the past decade has been our hottest on record.  Along our eastern seaboard, a number of cities now flood regularly at high tide.  In the West, 20 of the 25 largest fires in the last 100 years have occurred since 2000. Severe weather events over the last decade related to climate change have cost families, businesses, and taxpayers billions of dollars. It’s clear that we need to act.

The Obama Administration has made climate a high priority by working hard to reduce carbon pollution here in the United States and by bringing other countries along to forge an effective global effort to combat this problem.  Two months ago, President Xi of China joined President Obama to announce a historic step for climate change action. President Obama announced an ambitious but achievable goal to cut greenhouse gas emissions 26-28 percent below 2005 levels by 2025.  And China agreed to peak its carbon emissions around 2030 – the first time China has ever committed to peak its carbon pollution – and to double the share of zero-emission energy sources to 20 percent by 2030. In the United States, our carbon pollution is near its lowest levels in almost two decades.  We set higher standards for fuel economy, so that our cars will go twice as far on a gallon of gas, and are setting a new standard for trucks that will drive American manufacturing and spur the development of new technologies. 

Recognizing the need to help communities step up to prepare and respond to the impacts of climate change they are already seeing, we are also working with governors, local officials, and tribal leaders to prepare for climate change. Additionally, part of the President’s commitment on climate and clean energy means leading by example: setting a new aggressive 2025 target to cut the Government’s pollution emissions.

Serving Our Nation’s Veterans: The President has laid out five pillars to ensure that the brave men and women who served this country have the care, benefits, services, and opportunities they earned and deserve. Those are: ensuring veterans have the resources they need; getting veterans the health care they need; ending the backlog in disability claims; ending the scourge of veterans’ homelessness by the end of the year; and building out tools such as the Veterans Employment Center and the Boots to Business initiative to get veterans and their families the jobs, skills, and education they need to succeed.

Safeguarding American Consumers and Families in a Digital Age: In the lead-up to the State of the Union, the President announced that the Administration is building on the steps he has taken to protect American companies, consumers, and infrastructure from cyber threats, while safeguarding privacy and civil liberties, including improving consumer confidence by tackling identify theft, safeguarding student data in the classroom, and beyond, convening the public and private sector to tackle emerging privacy issues, and promoting innovation by improving consumer confidence.

Securing Cyberspace: The President recently unveiled the next steps in his plan to defend the nation’s systems.  These include a new legislative proposal, building on important work in Congress, to solve the challenges of information sharing that can cripple response to a cyber-attack.  They also include revisions to provisions of the Administration’s 2011 legislative proposal that called on Congress to take urgent action to give the private sector and government the tools they need to combat cyber threats at home and abroad while fully protecting privacy and civil liberties. And the President is extending an invitation to work in a bipartisan, bicameral manner to advance this urgent priority for the American people, including by convening the first White House Summit on Cybersecurity and Consumer Protection at Stanford University in February, to help shape public and private sector efforts to protect American consumers and companies from growing threats to consumers and commercial networks.

Making Government Work for the American People: In 2014, the Administration piloted the U.S. Digital Service (USDS) by recruiting private sector innovators, entrepreneurs, and engineers to government service.  Since standing up, this team of America’s best digital experts has worked in collaboration with Federal agencies to implement cutting edge digital and technology practices on the nation’s highest impact programs, including the successful re-launch of HealthCare.gov, the Veterans Benefits Management System, and an improved process for online visa applications. This small team is also working to recruit more highly skilled digital service experts and engineers into government.  Building on the successful launch of USDS, the President is proposing to scale and institutionalize this new approach to technology. The President’s Budget will also support the ability of several Federal agencies to create their own versions of the Health and Human Services “Idea Lab” and the USAID Global Development Lab, which are successfully cultivating new ideas and approaches from across their workforces and outside innovators.

Additionally, the President continues to call on Congress to revive the reorganization authority given to nearly every President from Herbert Hoover to Ronald Reagan.  This authority would allow the Administration to submit plans to consolidate and reorganize Executive Branch departments and agencies for fast track consideration by Congress, but only so long as the result would be to reduce the size of Government or cut costs. The President’s Budget will include specific examples of steps the President would take if granted that authority.