updated 1/5/2004 12:42:40 PM ET 2004-01-05T17:42:40

Democratic presidential candidate John Kerry proposed Monday a $25 billion package to aid cash-strapped states and recharge the economy.

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Kerry coupled his proposal with a series of efforts to end the drain of American jobs overseas, largely by shifting tax policies to reward companies keeping jobs in the United States.

Most polls have shown Kerry in third place in the race for Iowa’s leadoff caucuses, trailing Howard Dean and Dick Gephardt. Kerry has stepped up the pace of his campaign in recent weeks and was seeking to draw attention with a high-profile speech touting his efforts to boost the economy.

In remarks prepared for delivery Monday, the Massachusetts senator downplayed recent reports of economic improvement, arguing that most workers haven’t felt any change.

An extra 3 cents for every hour
“In an economy that grew 8 percent last quarter, the average American got to bring home an extra 3 cents for every hour of work,” he said. “That’s the slowest wage growth in 40 years.”

Kerry’s proposals included:

—Setting aside $25 billion a year for two years to aid states struggling with budget deficits. States have boosted college tuition and taxes, more than offsetting tax cuts President Bush has pushed, Kerry said.

—Raising the minimum wage, which hasn’t been increased since 1996.

—Providing a tax credit on the first $4,000 a year a family spend on college tuition. He would have a 100 percent credit on the first $2,000 and a 50 percent credit on the second $2,000.

Many Democrats have worried that signs of economic improvement have dimmed their hopes of ousting Bush, but Kerry discounted that improvement.

“They may be celebrating this so-called recovery in the White House and on Wall Street, but it’s not so rosy in the houses down on Main Street,” he said. “America can do better than a Bush-league recovery — we can have a real recovery that reaches every American.”

Kerry argued that the nation would be better served by strategic investments in key infrastructure areas, including creating an education trust fund to bolster local schools. He put no price tag on that fund.

Kerry underscored an earlier proposal giving workers a $10,000 tax deduction for the expenses of training or other steps taken to improve job skills.

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