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Obama's challenge: reversing a decade of middle-class decline

President Obama on Monday pitched a slew of measures to help middle-class families pay the bills. Living standards for many middle-class Americans have fallen during the past decade.

President Barack Obama and Vice President Joseph Biden attend the meeting of the White House Task Force on Middle Class Families in the Eisenhower Executive Office Building on the White House complex in Washington Monday.

Larry Downing/Reuters

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President Obama's latest economic relief effort, unveiled Monday, comes as America's middle class is by key measures slipping backward.

The definition of who is in the middle class is fuzzy, but it's not hard to see why the White House is pitching proposals directly the kind of families who work, vote, and traditionally have had opportunities to steadily climb the economic ladder.

After rising for generations, living standards have stagnated over the past decade for millions in this group. Real median incomes have been declining amid rising healthcare costs and college tuition. And an unprecedented pileup of household debt has accompanied greater risk of decline in the value of the typical family's major asset – a house.

All this doesn't mean that middle-income America is falling off an economic cliff, or that it has been hit harder by recession than other groups. (The rich and poor have also seen their median incomes decline since 2000.)

But America's middle class represents a large swath of the voting public, a group more politically powerful than the poor and more vulnerable to economic swings than the wealthy. And the goal of an expanding and prospering middle class has long served as a litmus test for the nation's well-being.

Obama and his middle-class task force, led by Vice President Biden, propose doubling a child care tax credit for families earning less than $85,000 a year and ensuring that student-loan payments are capped at 10 percent of the borrower's discretionary income. They also propose new initiatives to help families supporting elderly relatives.

These measures won't fix all the challenges faced by working families, the president acknowledged. But the proposals indicate the political urgency of the issue, with unemployment at about 10 percent and congressional elections in the fall.

Here's a snapshot of where the US middle-class now stands:

• Median household income stood at $50,303 in 2008, according to a Census report released last fall. That figure is below where it stood a decade earlier, at $51,295, after adjusting for inflation, and a break from steady decade-by-decade gains seen since World War II. Stimulus programs, such as tax cuts, have helped many families avoid further declines in income since 2008.


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