Waters Parting for a Middle Class Tax Break Renaissance

Several ideas President Obama plans to share Wednesday in the State of the Union message will appeal to almost everybody:

• $1.6 billion in additional child-care funding in 2011
• Increased elder care for family care-giving
• Student federal loan payment levels tied to borrowers' incomes
• Child tax credit deduction limit increased from 20% to 35% for families earning less than $85,000 per year
• Mandate to employers to provide direct-deposit retirement savings account enrollment option
• Retirement savings protection safeguards

As wonderful as they all sound, these ideas would cost money.  Whether politically-motivated to court the middle class (as some are suggesting in the wake of the Massachusetts special election meltdown) or substantive or both, someone will have to bear the costs. 

Can we reconcile these benefit proposals (and others we may hear about) with the president's endorsement of deficit reduction?  It isn't readily apparent that they can be reconciled.  We can only wait to see if the proposed independent commission's deficit reduction recommendations to Congress would make any real difference. 

With or without an independent commission, raising the debt ceiling by $1.9 trillion sounds like the easier course.  It is certainly likely, and many think that's where the "smart" money is.