Middle-income group feels squeeze in election

David Hicks will still be paying back his student loans by the time his children, now aged 10 and 12, are in college, and he plans to refinance his modest home to help pay for their schooling.

College, rising health care costs and higher prices for everything from food to fuel are the issues that Hicks and millions of other American middle-income families are up against. When they go to the voting booth next week, many of them will wonder who, if anyone, on the ballot can help them.

"I just don't think that anybody in Washington is thinking about the interests of people in my family income bracket," said Hicks, 37, of Evansville, Indiana.

"Here it is, less than two weeks before the election, and I really don't know who I'm going to vote for," Hicks told Reuters ahead of the November 7 congressional election.

The Republican incumbent in Hicks' district, Rep. John Hostettler (news, bio, voting record), is in a close race with Democrat Brad Ellsworth.

"Honestly I don't think either one of them is going to help our situation," said Hicks, a registered independent who has voted for both Republicans and Democrats in the past.

The plight of the middle class is especially stark given that the stock market is at a record high, corporate profits are up and top executive pay continues to rise.

"After 10 months of thousands of conversations with middle-class families, I can tell you that everything that's been said about the disconnect between Wall Street gains and Main Street struggles is true," said Irma Esparza, executive director of Communities United to Strengthen America, an advocacy group. "Middle-class families are paying attention to this election and they're tired of being squeezed."

According to the Pew Research Center, among those with incomes of $30,000 to $49,999, 48 percent are supporting Democratic candidates and 40 percent are likely to vote for Republicans. That's a reversal from 46 percent supporting Republicans and 43 percent behind Democrats in the 2002 race.

But the switch has been less marked among middle-income voters than among those at higher incomes, the Pew center said.

TAX CUTS

President George W. Bush has said repeatedly that tax cuts enacted during his presidency, offering, among other things, capital gains tax relief and child tax credits, have helped buoy the economy and given U.S. families a lift.

"The tax cuts we passed have left more than a trillion dollars in the hands of American workers, families and small businesses and you have used that money to fuel a strong and growing economy," he said in his weekly radio address on October 28.

The president's top economist, Edward Lazear, said tax cuts have helped raise the value of stocks, which many Americans hold in their retirement savings accounts.

However, many analysts -- and many members of the nation's vast middle class -- contend average wage earners have seen little benefit from the Bush tax breaks.

For example, the government's latest data shows that less than half of the U.S. population own stocks, either directly or through retirement savings plans, meaning most of them have received no direct benefit from rising stock prices.

"The tax cuts so far haven't done much for the middle class in terms of boosting employment or incomes," said Christian Weller, an economist at the Center for American Progress, a think tank headed by John Podesta, a former aide to the Clinton White House.

According to a recent study by the group, the typical double-income family in the United States is worse off than ever. Middle-class families are struggling to pay for a home, health insurance, transportation and their children's college with wages that have not kept pace with higher prices.

From 2001 to 2004, the proportion of middle-class families that had three months' worth of income in savings dropped to 18.3 percent from 28.8 percent, the study said.

INCOMES FLAT

While the Bush administration says more Americans are employed now than ever before, their yearly incomes have not increased as much as in years past.

Median incomes posted only a 1.1 percent gain from 2004 to 2005. At $46,326, they had yet to regain their 2000 peak of $47,599, according to the Census Bureau's latest data.

Hicks, who borrowed money to put himself through college in the early 1990s, has held the same job since 1998.

While his health care costs have gone up more than 25 percent a year, his income has risen, on average, less than a tenth of a percentage point a year.

"I'm with the same company and I've had the same medical care plan for four people, and we're all healthy, and my medical care expenses have gone up 241 percent," he said.

All the while, he is paying back the 16 student loans he took out, and when tax time comes, he can only write off a fraction of the interest on those loans each year.

"I'm just one of the average Joes in the middle class that works for a corporation in which the higher levels have given themselves exorbitant raises, while the working class pays higher health care costs and is not seeing benefits from corporate profits," Hicks said.

Space Shuttle Atlantis 'ready to go' on August 27

NASA declared the Atlantis shuttle ready to launch on August 27 on the first mission aimed at completing construction of the International Space Station since the 2003 Columbia disaster.

"We have set the launch date again for the 27th (of August)," Bill Gerstenmaier, the NASA associate administrator for space operations, said in a televised news conference from the Kennedy Space Center in Florida. "We are ready to go for that."

NASA officials voted unanimously to go ahead with the launch after a two-day flight readiness review, Gerstenmaier said. The shuttle has an August 27-September 13 launch window.

The Atlantis flight will be the third shuttle mission since Columbia disintegrated over Texas in February 2003.

The previous two Discovery missions, last year and in July, focused on testing shuttle repair techniques and reducing the risk of damaging foam insulation peeling off the orbiter's external fuel tank during liftoff. Columbia was doomed by a large piece of foam that pierced its heat shield during launch.