Obama Takes State of the Union Message on the Road

An effort to build support for proposals from his annual address

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Susan Walsh / AP

President Barack Obama waves as he walks through a door to leave the House chamber after giving his State of the Union address on Capitol Hill in Washington, Jan. 28, 2014

President Barack Obama is taking his State of the Union message on the road this week as he looks to expand on and boost public support for proposals he floated in his annual address Tuesday night.

While the speech was light on new proposals, the Obama administration is looking to build on whatever momentum the State of the Union provided with a four-state swing that starts Wednesday. But Obama is avoiding states where vulnerable Democratic senators are up for reelection; lawmakers facing tough races this fall have often ducked him.

Obama will visit a Costco store in Lanham, Md., on Wednesday, where he will highlight his plans to sign an executive order raising the minimum wage for new federal contractors. Obama will also repeat his call for Congress to act to raise the federal minimum wage for all workers, the White House said. The White House said the president will highlight efforts by Costco to pay its workers a living wage.

“Today, the federal minimum wage is worth about 20 percent less than it was when Ronald Reagan first stood here,” Obama said Tuesday night. “And Tom Harkin and George Miller have a bill to fix that by lifting the minimum wage to $10.10. It’s easy to remember, $10.10. This will help families. It will give businesses customers with more money to spend. It does not involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise.”

Later Wednesday, Obama will travel to the United States Steel Corporation Irvin Plant in West Mifflin, Pa., to highlight his newly-announced “starter savings account” to help Americans being saving for their retirement by investing in Treasury bonds. At the event, the White House said, Obama will order the creation of the program, called “myRA.”

Obama will also repeat his call on Congress to require employers to provide access to payroll-deduction retirement savings accounts, the White House said, while establishing auto-enrollment for workers.

On Thursday, Obama will travel to Milwaukee, Wis., to discuss his administration’s proposals for improving job training opportunities for workers, and to Nashville, Tenn. to highlight success at a local high school.

Mary Burke, a Wisconsin Democratic candidate for governor, will not attend Obama’s speech in her state on Thursday, the Milwaukee Journal Sentinel reports. Senior administration officials maintained the locations were chosen not for political reasons, but rather because the specific sites fit the messages the White House is trying to drive.

More details on Obama’s travel from the White House:

On Wednesday, the President will travel to expand on themes of the State of the Union Address, and discuss new ways to build economic security for the middle class and expand opportunity for all so that every American can get ahead.

In Maryland, the President will visit Costco in Lanham, Maryland in Prince George’s County and receive a tour by the store’s employees.  At Costco, the President will talk about the importance of raising the federal minimum wage for all Americans.  Costco is an example of a business that is acting on its own to pay its workers a fair wage, supporting increases to the minimum wage because it helps build a strong workforce and profitability over the long run through increased productivity, better morale, and lower turnover rates.
Across the country, Americans say it’s time to raise the minimum wage and the President believes it’s time for action. Since the President called for an increase in last year’s State of the Union, five states have increased their minimum wages, and many states like Maryland are pushing to act this year.  Governor O’Malley has proposed raising the state’s minimum wage to $10.10.  In 2007, Maryland passed a living wage law for companies contracting with the state, there was an increase in the number of contractors bidding — and greater competition can help ensure better quality.
In his State of the Union Address, the President made clear that while he will continue working with Congress to pass the Harkin-Miller bill, which would raise the federal minimum wage to $10.10 for all Americans.  The President also announced that he will lead by example and do what he can through executive action to help raise wages and opportunity for hardworking Americans. In the coming weeks, the President will sign an executive order to raise the minimum wage to $10.10 for those working on new federal contracts, something that will benefit hardworking Americans – including janitors, cashiers, construction workers, and others – working on federal contracts.  A higher minimum wage for workers on government contracts will improve the efficiency of federal contracting for the federal government and the taxpayer.

In Pennsylvania, the President will visit the United States Steel Corporation Irvin Plant in West Mifflin, Pennsylvania where he will discuss the progress we have made in our economy and new proposals to increase opportunity for all Americans, including a new executive action announced to help millions of middle class Americans save for retirement.  Many Americans lack access to workplace retirement savings plans – usually the most effective and generous means of saving for retirement.  About half of all workers and 75 percent of part-time workers lack access to employer-sponsored retirement plans.

At the event, the President will sign a Presidential Memorandum directing the Department of Treasury to create “myRA” – a new simple, safe and affordable “starter” retirement savings account that will be offered through employers and will ultimately help millions of Americans begin to save for retirement. This savings account would be offered through a familiar Roth IRA Account and, like savings bonds, would be backed by the U.S. Government.

Details about the myRA proposal are below:

Ø  Starter Savings Account: Making It Easier to Start Saving for Retirement. This new product will be targeted to the many Americans who currently lack access to workplace retirement savings plans, which is usually the most effective way to save for retirement. Starting to save is just the first step towards a secure retirement, and the President wants to help more Americans save for their future.

Ø  Safe and Secure: Principal Protection So Savers’ Account Balance Will Never Go Down.  This savings account would be offered through a familiar Roth IRA account, and, like savings bonds, would be backed by the U.S. government.  Investors will benefit from principal protection, so the account balance will never go down in value.  Contributions can be withdrawn tax-free at any time.

Ø  User-Friendly for Savers: Portable Account with Contributions that Are Voluntary, Automatic, and Small. Initial investments could be as low as $25 and contributions that are as low as $5 could be made through easy-to-use payroll deductions.  Savers have the option of keeping the same account when they change jobs and can roll the balance into a private-sector retirement account at any time.

Ø  Favorable Investment Return: Same Secure Investment Return Available to Federal Employees. Savers will earn interest at the same variable interest rate as the federal employees’ Thrift Savings Plan (TSP) Government Securities Investment Fund.

Ø  Widely Available: Available to Millions of Middle Class Americans Through Their Employer. This saving opportunity would be available to the millions of low- and middle-income households earning up to $191,000 a year.  These accounts will be offered through an initial pilot program to employees of employers who choose to participate by the end of 2014.  The accounts are little to no cost and easy for employers to use, since employers will neither administer the accounts nor contribute to them.   Participants could save up to $15,000, or for a maximum of 30 years, in their accounts before transferring their balance to a private sector Roth IRA.

And the President will continue to work with Congress to do more to strengthen retirement security, including:

§  Giving Every Employee Access to Easy, Payroll-Based Savings Through the Auto-IRA. About half of all American workers do not have access to employer-sponsored retirement plans like 401(k)s, which puts the onus on individuals to set up and invest in an Individual Retirement Account (IRA). Up to 9 out of 10 workers automatically enrolled in a 401(k) plan through their employer make contributions, even years later, while fewer than 1 out of 10 workers eligible to contribute to an IRA voluntarily do so. The President’s budget will propose to establish automatic enrollment in IRAs (or “auto-IRAs”) for employees without access to a workplace savings plan, in keeping with a plan that he has proposed in every budget since he took office. Employers that do not provide any employer-sponsored savings plan would be required to connect their employees with a payroll deduction IRA.  This proposal could provide access to one-quarter of all workers, according to a recent study.

¾    Making Sure the Auto-IRA Works for Workers and Small Businesses. Workers would not be required to contribute and are free to opt out. Employers would also not contribute. The plan would also help defray the minimal administrative costs of establishing auto-IRAs for small businesses, including through tax incentives.

§  Removing Inefficient Retirement Tax Breaks for the Wealthiest While Improving Them for the Middle Class.  The Auto-IRA will spread the tax benefits for retirement savings to millions more middle-class Americans.  Current retirement tax subsidies disproportionately benefit higher-income households, many of whom would have saved with or without incentives. An estimated two-thirds of tax benefits for retirement saving go to the top 20% of earners, with one-third going to the top 5 percent of earners. Our tax incentives for retirement can be designed more efficiently.   According to one 2012 study, additional tax expenditures are a comparatively inefficient way to generate additional saving. The President has proposed to limit the benefits of tax breaks, including retirement tax preferences, for high income households to a maximum of 28 percent.  The President has also proposed to limit contributions to tax-preferred savings accounts once balances are about $3.2 million, large enough to fund a reasonable pension in retirement.


The Vice President and Dr. Jill Biden will visit Monroe Community College in Rochester, New York to amplify the President’s commitment to improving federally-funded training programs to make them more job-driven; supporting partnerships between community colleges, businesses and industry groups; increasing apprenticeships; and helping the long-term unemployed return to work.