Last night, President Barack Obama delivered his State of the Union speech, which addressed the most palpable pain point affecting Americans today: the state of the economy.
Here are some key takeaways from the President's speech that will affect LearnVesters:
“Jobs Must Be Our Number-One Focus in 2010”
While the nation has shown significant economic recovery since last year, Obama noted, one out of ten Americans remains unemployed. He called for a new jobs bill to address this issue immediately.
The Government Will Regulate Financial Institutions—And Protect Consumers
“We need to make sure consumers and middle-class families have the information they need to make financial decisions.” Obama addressed the need to protect consumers from financial abuse by financial institutions through increased regulations, and by empowering consumers with knowledge about how their actions could affect their financial health. "A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes. But that can only happen if we guard against the same recklessness that nearly brought down our entire economy."
There May Be a Tax Credit for Attending College
In the speech, Obama argued that education is the best defense against poverty. He proposed giving families a $10,000 tax credit for four years of college and increasing Pell Grants. In addition, he suggested that graduates will be required to spend only 10% of their income on student loans, and all student debt will be forgiven after twenty years (ten years if students decide to work in public service after graduation). “In the 21st century, the best anti-poverty program around is a world-class education […] in the United States of America, no one should go broke because they chose to go to college.”
Obama Administration to Step Up Home Re-Financing Programs
“We're working to lift the value of a family's single largest investment – their home.” He stated in the Union address that last year his administration saved an average of $1,500 per family on mortgage payments. His administration is looking to step up programs to encourage re-financing of homes so that homeowners can establish more affordable, sustainable mortgages.
Every Worker Will Have Access to a Retirement Account
“[We’re] making it easier to save for retirement by giving access to every worker a retirement account and expanding the tax credit for those who start a nest egg.” In the State of the Union speech, Obama detailed measures to help Americans prepare for their life changes, such as paying for college and managing retirement. To do so, he plans to double the child tax credit this year, and initiate automatic IRAs for workers who do not have existing retirement plans.
Obama Appeals to Bipartisanship for Reform Healthcare
The President said, “If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know […] I'm eager to see it.” Obama revisited health care reform in his speech, and appealed for Washington to reach bipartisanship and find an acceptable solution to the status quo.
Equal Pay Laws—Actually Being Enforced
The President is establishing a National Equal Pay Enforcement Task Force to increase awareness and compliance of equal pay laws! In his speech, he was quoted as saying, “We are going to crack down on violations of equal pay laws—so that women get equal pay for an equal day’s work.”
Is Obama Starting His Own Financial Bootcamp?
Maybe the federal government should join the LearnVest Financial Bootcamp, as it seems to be following the same principles: “Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't.” In the State of the Union speech, President Obama announced that he is planning to freeze government spending for three years (starting in 2011). Government spending pertaining to National Security, Medicare, Medicaid and Social Security will remain unaffected by this freeze. He said that he will go through the nation’s budget, “line by line, page by page” to eliminate unnecessary or ineffective programs.
Despite the grim state of our union, Obama stated that “the worst of the storm has passed,” and stressed the potential for hard work, collaboration and optimism to remedy the nation’s current state. Here’s to an improved nation and robust economy, which begins with a more financially-savvy you.