Obama Touts Economic Plan With Increased Access to Paid Leave, a Minimum Wage Hike

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By Chris Opfer

Jan. 21 — President Barack Obama made the case for a “middle-class economics” plan Jan. 20 in his annual State of the Union address to Congress, urging lawmakers to support a variety of income growth proposals, including expanding tax credits for workers; raising the federal minimum wage; increasing access to higher education, job training and paid sick leave; and creating business opportunities through trade deals and infrastructure investment.

Touting recent economic improvements evidenced by falling unemployment, a flurry of job creation activity and stock market gains, the president said the government should implement his proposals and other policies to spur income growth among working families. “Middle-class economics works,” Obama said. “Expanding opportunity works. And these policies will continue to work, as long as politics don’t get in the way.”

The president pointed in particular to infrastructure projects and pending trade agreements as opportunities for potential bipartisan agreement. He acknowledged that these and other proposals—like new-child and “second earner” tax credits and a plan to provide students two years of free community college classes—will likely face contentious debate in Congress over how they should be paid for and implemented, however.

Obama renewed his calls for lawmakers to pass a variety of worker-based legislation, such as bills to raise the federal pay floor, require employers to offer paid sick leave and bolster protections against pay discrimination. Those measures are likely to be a tough sell in the Republican-controlled Congress, where opponents say the proposals would impede business activity and hiring, while scaled-back or alternate versions of bills pushed by Democrats in the last Congress could see some success.

“Unfortunately, much of what I heard from President Obama tonight are partisan proposals that don’t have any chance of becoming law—and that he intends to pursue despite the message the American people sent him in November by electing a Republican Congress,” Sen. Lamar Alexander (R-Tenn.) said in a statement following the speech. Alexander is chairman of the Senate Committee on Health, Education, Labor and Pensions.

Opening Negotiations

Seth D. Harris, a former deputy labor secretary in the Obama administration, told Bloomberg BNA Jan. 21 that Obama's remarks were the opening salvo in what's likely to be continued negotiations with Congress during his last two years in office.

That includes staking out a starting position on worker-related issues like minimum wages, sick leave and pay discrimination, Harris said. It also means moving ahead on unilateral plans to significantly expand the number of workers eligible for overtime pay under federal law and to protect millions of undocumented immigrants from deportation.

“A lot of these things are in play, even though the Republicans wouldn't vote on an up-or-down vote,” Harris said. “The essence of legislating is what deal are you willing to cut? That's the question that we're facing.”

In addition to saying he'll work with states to implement paid sick leave laws, Obama called on Congress to pass legislation requiring employers to offer their workers the ability to earn up to seven days of paid sick leave per year. Harris said Obama could be able to get Republicans onboard with some version of these proposals if they came with the right incentives.

The sick leave plan stands in contrast to Republican-sponsored legislation that would allow workers to earn compensatory time in lieu of overtime wages, for example, and a separate bill expected to be introduced by Sens. Deb Fischer (R-Neb.) and Angus King (I-Maine) that would offer employers tax incentives for offering workers paid sick and family leave.

Meanwhile, Obama's call to raise the pay floor comes as Sen. Susan Collins (R-Maine) continues to seek support for a measure that would increase the federal minimum wage to $9 from $7.25 an hour, according to spokesman Kevin Kelley. That's less than the $10.10 level that the White House has been pushing for, but it is more likely to get the bipartisan support to make it through Congress.

To contact the reporter on this story: Chris Opfer in Washington at copfer@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com