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In his State of the Union message, the President bragged about record economic growth and said, "middle class economics works." But average American incomes haven't gone up significantly since 1973 — and Republican politicians have noticed. Will they try to steal the issue from Democrats in the presidential campaign?

Also, Attorney General nominee Loretta Lynch faces the Senate. On today's Talking Point, why is China building islands in the South China Sea?

Photo: Timothy Krause


Attorney General Nominee Loretta Lynch Faces Senate 6 MIN, 29 SEC

Loretta Lynch will need at least three Republican votes from the Senate Judiciary Committee to become the first African American woman to serve as Attorney General of the United States.  She would succeed Eric Holder, who has clashed with the GOP.  In her opening statement as her confirmation hearing opened today, she said that she looked forward "to fostering a new and improved relationship with this committee, the United States Senate, and the entire United States Congress. A relationship based on mutual respect and Constitutional balance." Josh Gerstein is senior White House reporter for Politico.

Josh Gerstein, Politico (@joshgerstein)

"Middle Class Economics" and Republican Politics 34 MIN, 8 SEC

US economic growth may be setting records, but next year's presidential campaign will focus on poverty, stagnant wages and income disparity. That's if some Republican candidates have their way — including Marco Rubio, Rand Paul, Jeb Bush — and even Mitt Romney.  Eight Republican governors are asking for increased taxes.  Is the GOP really co-opting a core Democratic issue?  How does that sound to the Koch Brothers — with plans to spend $900 million on next year's campaigns? 

Jonathan Weisman, New York Times (@jonathanweisman)
David Wessel, Brookings Institution (@davidmwessel)
James Pethokoukis, American Enterprise Institute (@jimpethokoukis)
Jared Bernstein, Center on Budget and Policy Priorities (@econjared)

Obama on 'simplier, fairer' tax code to benefit middle class
Weisman on Obama relenting on proposal to end '529' college savings plan
Weisman on talk of wealth gap prodding the GOP to refocus
Center for American Progress report on 'inclusive prosperity'
Pethokoukis on the 'room to grow' conservative tax plan
Brookings on whether billionaires can buy elections

Red Ink

David Wessel

China's Island Factory 9 MIN, 1 SEC

The US is increasing naval forces in the western Pacific, where tensions are on the increase between China and neighboring countries.  Now China is building five artificial islands in the South China Sea, turning shoals and reefs into islands in waters contested by Malaysia, Taiwan, Brunei, Vietnam and the Philippines, a treaty ally of the United States.  One observer says they're not really islands, but military runways surrounded by water.  He's Robert Kaplan at the Center for a New American Security.  He's author of Asia's Cauldron: The South China Sea and the End of a Stable Pacific.

Robert D. Kaplan, Center for a New American Security (@RobertDKaplan)

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