Administration proposes help for middle class

NEW YORK (CNNMoney.com) -- In its first annual report released Friday, the Obama administration's middle-class task force introduced plans to address the "middle-class squeeze" in the U.S. economy.

Vice President Joe Biden, who heads the year-old task force, said that the administration's focus over the past year has been on issues including retirement security, access to affordable education, the balance of work and caregiving and the creation of jobs for middle-class workers.

To address these issues, the task force has introduced new initiatives for fiscal year 2011, such as a plan to protect retirement savings, a way to lower student loan payments and a proposal to increase a tax credit that would help with rising child care expenses.

Retirement: The retirement savings initiative would introduce new regulations to "improve the transparency and adequacy" of 401(k) savings, and employers will be required to enroll employees in a payroll-deduction IRA if the company doesn't already offer a retirement plan.

Under the same plan, the saver's credit for working families will become fully refundable and will be expanded to match 50% of the first $1,000 of a person's retirement savings for families who make up to $65,000.

"After a lifetime of employment, American workers deserve a secure retirement," the report said. "Yet for middle-class workers today, especially in the wake of the historic losses to retirement savings and housing wealth in the financial crisis, retirement seems anything but secure."

Education: In order to make college more affordable, the administration plans to make efforts to reform student lending, cap student loans, and proposes to permanently extend the American Opportunity Tax Credit, which is worth up to $2,500 per year.

Caregiving: As a way to help middle-class families handle the high costs of caregiving, the administration said it is aiming to nearly double the Child and Dependent Care Tax Credit and boost funding for the Child Care and Development Fund by $1.6 billion.

Jobs: The administration's plan to protect employees and create more jobs includes passing the Employee Free Choice Act to help workers who want to form unions, and offering tax benefits to small businesses to encourage hiring.

In order to support the manufacturing sector and encourage the creation of green jobs, the administration also plans to improve the process of procuring government contracts, invest in clean energy manufacturing and infrastructure, and add $5 billion to the $2.3 billion Advanced Energy Manufacturing Tax Credit.