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Pioneer Editorial: Growing the middle class next debate

Vice President Joe Biden's visit to St. Cloud on Thursday was more boosterism than fact-finding, but it also provided a forum for what do we do after the federal economic stimulus package is spent to continue job growth and expand the middle class.

Biden, who heads the Middle Class Task Force, said the Recovery Act will provide a strong start, but that the Obama administration will seek policies to continue middle class growth. While in St. Cloud, the White House released a staff report on how the Recovery Act helps middle-income families and also lays out a discussion for the future.

The so-called American Dream gained ground after World War II and proclaimed a philosophy that Americans can succeed in the economy and ensure that their children reach even higher heights. As Vice President Biden noted Thursday, Americans have lost confidence in that dream in the current economy. That's exacerbated by the report's findings that between 1947 and 1979, both productivity and middle-class income more than doubled, and that their growth rates were about the same. The tide turned, however, since the 1980s as middle incomes have grown by only 25 percent as fast as productivity, as the wedge of inequality has funneled most of the growth to higher income groups.

The Recovery Act is a start, Biden said. The report indicates that:

E Jobs created by the act should lower the unemployment rate by about 2 percentage points. It should increase middle-class incomes by $1,300 or 2.3 percent.

E Depending on family type and circumstances, the tax benefits under the act should add $2,000 or more to after-tax family income.

E Combining job and tax effects, the act will lift incomes by around $3,000 for many middle-class families.

E For middle-class families with spells of unemployment, tax credits and safety net expansion in the act, combined with existing unemployment insurance programs, can replace much of the income loss that occurs when a wage-earner in the family loses a job.

The key, the vice president said, is to move on past the act.

The report notes how the expansion of broadband technology in rural areas that lack Internet access would give greater access to information and job hunt abilities. Those who take advantage of weatherization aid in the Recovery Act could save hundreds per year in energy costs to insulate their homes. The task force will next tackle the issue of making college affordable, which can aid sustained growth.

What the administration must do now, as the report notes, is to "create the policy 'glue' to reconnect growth and middle-class prosperity." That, indeed, will be a daunting challenge.