Obama: Here's $1,000

IOWA | Offers tax cut in appeal to middle class

BETTENDORF, Iowa --Hoping to make it easier for working Americans to realize their dreams, White House hopeful Barack Obama on Wednesday proposed a sweeping legislative package aimed at shoring up middle America.

The legislation -- which Obama will champion if elected president in 2008 -- calls for expanding the Family and Medical Leave Act to cover "more businesses and millions more workers" and giving college students a $4,000 refundable tax credit on their tuition.

And like rival U.S. Sen. Hillary Clinton's plan to rejuvenate middle class fortunes, Obama's package also offers a workplace pension policy that requires businesses to enroll workers in portable, direct-deposit retirement accounts.

"And the federal government will match savings for working families," Obama said, although he didn't disclose costs. "This will dramatically increase the number of Americans who save for retirement."

The package also includes proposals Obama has made before:

•   •   Provide an income tax cut of $1,000 per working family.

•   •   Target mortgage fraud by raising "penalties on lenders who have broken the rules."

•   •   Provide a tax credit covering 10 percent of a family's mortgage interest payment each year.

•   •   Establish a Credit Card Bill of Rights to ban "unilateral changes to a credit card agreement."

Obama said he wants to "put some wind at the backs of working people, to lower the cost of getting ahead" and "protect and extend opportunity for the middle class."

"There has been a lot of talk in this campaign about the politics of hope," Obama said. "But understand, the politics of hope doesn't mean hoping that things come easy. It's a politics of believing in things unseen; of believing in what this country might be; and of standing up for that belief and fighting for it when it's hard."

"And what binds us together, what makes us one American family is that we stand up and fight for each other's dreams, not just our own."

Earlier this year, Obama laid out his plan for more than $80 billion in tax cuts for middle class Americans offset by tax increases for investors and companies. That proposal involved raising the top rate on capital gains and dividends, eliminating ''corporate loopholes,'' including one used by hedge funds and private-equity firms, and cracking down on overseas tax havens.

Clinton, of New York, and another Democratic rival, former U.S. Sen. John Edwards (D-N.C.), have also endorsed tax increases for investment funds and wealthier Americans.

Obama is on a weeklong campaign swing through Iowa, home of the nation's first presidential contest on Jan. 3. He trails Clinton in state polls.

Contributing: Bloomberg News