President Outlines "Middle-Class Economics" Narrative in SOTU

During last night's State of the Union address, President Obama touched on a number of employment and benefits-related topics that fit into his theme of promoting "middle-class economics." Although it is up to the new Congress to act on any of the President's proposals, the list of potential initiatives indicates the Administration's priorities over the remaining two years of this presidency. President Obama noted that in two weeks he would submit his budget to Congress embodying these priorities, and intends to "crisscross the country making a case for those ideas." 

As expected, the President pushed for private-sector paid sick and maternity leave. He urged Congress to pass proposals such as the Healthy Families Act, introduced last session by Rep. Rosa DeLauro (D-CT) and Sen. Patty Murray (D-WA), which would provide employees with up to seven days of paid leave.  

In addition, the President stated he would "be taking new action to help states adopt paid leave laws of their own." Details of this proposal were released last week. Among other things, the President's plan would allocate more than "$2 billion in new funds to encourage states to develop paid family and medical leave programs." The Department of Labor would use $1 million in existing funds to help states and localities conduct feasibility studies. 

As part of this middle-class economic theme, the President also encouraged Congress to raise the minimum wage, pass a wage equality measure, ward against potential wage theft, and promote laws that "strengthen rather than weaken unions, and give American workers a voice."  

Many ideas were rehashed from prior State of the Union addresses, including the promotion of company in-sourcing and the creation of new options for retirement savings. Specifically, in a fact sheet, the President outlined a number of proposals that will be reflected in his 2016 budget. Included in that wish list is a retirement tax reform plan that would automatically enroll a projected 30 million additional workers in retirement savings plans, the so-called "myRA” starter savings vehicle. According to the fact sheet, under this proposal, "every employer with more than 10 employees that does not currently offer a retirement plan would be required to automatically enroll their workers in an IRA. Auto-IRAs would let workers opt out of saving if they choose but would also let them start saving without sorting through a host of complex options." Another proposal would expand existing employer retirement plans to part-time employees. 

The President's budget will be presented to a Republican-controlled Congress that will likely not be receptive to many of his ideas. However, as he noted toward the end of his speech, "I have no more campaigns to run." Therefore, he has little to lose by taking executive actions to achieve some of his goals. Time will tell which, if any, will prove successful.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.