President Obama takes aim at rising inequality
Members of the Occupy movement, marching in New York in early December, are among the Americans upset by the increasing wealth gap in the country.
Stacey Vanek Smith: In a speech last night, President Obama took up the mantle of the middle class, saying it was under attack from wealthy interests.
Barack Obama: Today, we're still home to the world's most productive workers, we're still home to the world's most innovative companies. But for most Americans the basic bargain that made this country great has eroded.
Is the middle class really shrinking? For that, we turn to our own Gregory Warner. He joins us live. Good morning Gregory.
Gregory Warner: Good morning.
Smith: So Gregory, how "inequal" are we right now?
Warner: The middle class is shrinking. The president quoted from last month's report by the CBO that the income for the top 1 percent is up 250 percent. There's a study out of Stanford University that brings these numbers home in a different way. So if you figure in the 1970, most of us -- two out of three Americans -- lived in middle income neighborhoods. In 2007, less than half do. So when they say the American middle class is shrinking, its not just take-home pay; it's literally who your neighbors are, it's where your schools are, it's your community.
Smith: Turning then to the wealthiest community in the country, which is Washington DC. What's the latest political deadlock?
Warner: Payroll tax cuts. President Obama's been pushing to extend these tax breaks to next year. And this would increase take home pay by about 2 percent or 3 percent extra on your paycheck. The debate, of course, is how to pay for it. Democrats want to pay for this with a temporary tax on millionaires -- Republicans are against that. And that's up for a vote tomorrow which is predicted to fail but who knows? Things are shifting.
Smith: Our own Gregory Warner in Philadelphia. Thank you Gregory.
Warner: Thanks a lot.