The proposal is one of five recommendations from the president's Middle Class Task Force, which was established one year ago this week.
It comes as an increasingly populist White House struggles to regain political momentum among middle-class, independent voters frustrated by the slow pace of the economic recovery.
Obama will push to increase the Child and Dependent Care Tax Credit rate from 20 to 35 percent for families making under $85,000 a year. Families making from $85,000 to $115,000 also would see an increase in their tax credit, the official noted.
At the same time, lower-income families would receive a $1.6 billion increase in child care funding, the largest one-year increase in two decades.
In addition, the White House will propose limiting a student's federal loan payments to 10 percent of his or her income above a basic living allowance.
National Democrats are reeling after Massachusetts Attorney General Martha Coakley, a Democrat, lost to Scott Brown, a Republican state senator who was virtually unknown on the national stage until his upstart campaign began to gain momentum in recent weeks. Brown’s bid to finish out the remainder of the late Sen. Ted Kennedy’s final term gained traction in part because he campaigned on a pledge to be the 41st vote Senate Republicans need to block Democrats’ health care reform bill.
“John, we lost a very important seat, a very important vote,” Democratic strategist Donna Brazile told CNN Chief National Correspondent John King Sunday on CNN’s State of the Union. “It’s a disappointment,” Brazile also told King. “It hurts like hell. I can’t tell you how much it hurts. But, it’s also a gift. If we learn the lessons to get back to the basics, to deliver for the American people the change we promised them in 2008.”
“Well, maybe we can find more under the tree,” Bill Bennett, the host of conservative talk show “Morning in America,” said in response to Brazile. “If that’s the gift, then we want to keep on giving,” the conservative commentator added.
Pointing to polling of Massachusetts voters conducted just after Tuesday’s special election, Bennett said “dissatisfaction with the direction of the country, antipathy toward federal government activism, and opposition to the Democrats’ health care proposals drove the upset election” of Brown.
Related: Voter anger helped GOP pull Senate upset, poll says “Brown stressed a lot his unhappiness with the way the [Obama] administration was conducting the war on terror,” Bennett also pointed out Sunday. “The people spoke. The people of blue-on-blue Massachusetts spoke and it could not have been clearer.” Bennet declared.
Brazile disagreed with Bennett’s assertion that the Massachusetts upset was a repudiation of fundamental aspects of the agenda President Obama and congressional Democrats have pursued in the last year. “This is not a defeat that should cause Democrats to become demoralized or to begin to fail in their pledge to change the country. This is an opportunity,” Brazile said Sunday.
The CNN Washington Bureau’s morning speed read of the top stories making news from around the country and the world.
For the latest political news: www.CNNPolitics.com
CNN: CNN Poll: Majority of Americans say much of stimulus wasted
Nearly three out of four Americans think that at least half of the money spent in the federal stimulus plan has been wasted, according to a new national poll.
CNN: Senators say they'll support Bernanke
As the White House tries to rally wavering support for the re-confirmation of Federal Reserve chief Ben Bernanke, two senators – one Democrat and one Republican – announced Sunday that they will support the nation’s top banker despite reservations about him.
CBS News: McCain: Campaign Finance Reform Is Dead
Senator John McCain, who helped rewrite the nation's campaign finance laws, said Sunday that this week's Supreme Court ruling removing limits from corporate spending on political advertising means that campaign finance reform is dead.
ABC News: Foreign Money in American Politics?
Some election lawyers believe that last week's landmark U.S. Supreme Court opinion may have opened a new avenue for foreign money to enter the American political system, and that the justices are inviting a repeat of the 1996 Chinese money scandal that bloodied the Clinton administration.
CNN: Frustration over Israeli, Palestinian talks
U.S. President Barack Obama's special envoy to the Middle East ended a four-day trip to Israel and the West Bank with no breakthrough in persuading Israelis and Palestinians to go back to the negotiating table.
Washington Post: Pakistani government, military wary of U.S. overtures
Despite a string of high-profile visits designed to reassure Pakistan of Washington's commitment, U.S. officials have failed to win over a military and civilian establishment here that remains suspicious of U.S. ties to India and reluctant to plunge into war with Afghan militants who may outlast the U.S. presence.
CNN: Arkansas Democrat Berry expected to announce retirement
Arkansas Rep. Marion Berry is expected to announce Monday that he will not seek re-election and instead retire at the end of the year, two Democratic sources confirm to CNN. Berry would become the 12th Democrat to announce that he will not run for his House seat again in 2010.
Washington Post: Republicans' allies eye state legislatures as redistricting nears
Seeking to capitalize on the excitement among Republican potential donors after Scott Brown's stunning capture of a Senate seat in Massachusetts last week, two independent groups focused on helping the party regain state legislative majorities before next year's nationwide redistricting are significantly ramping up their efforts.
New York Times: An Unofficial Candidate, on the Trail
Mr. Ford, a five-term congressman from Tennessee, has given himself until the end of February to decide whether to challenge Senator Kirsten E. Gillibrand in New York’s Democratic primary, but in the first week of a statewide tour, he is quickly revealing what kind of candidate he would be: an effortless retail politician, equally at ease in baroque restaurants and Baptist churches, who makes instant, Clinton-like connections with voters.