President Obama's September 16th speech on the economy was overshadowed by breaking news: the tragic shootings at the Washington Navy Yard. Nonetheless, it was an important address that contained six important truths.
The president reaffirmed the economy continues to be his "number one priority... making sure we recover from the worst economic crisis of our lifetimes, and rebuilding our economy so it works for everybody who's willing to work hard."
The first truth is the economy has recovered since Obama took office. In 2009, the economy was shrinking and "businesses were shedding 800,000 jobs each month." Now the economy is growing. Since 2010, "our businesses have added 7.5 million new jobs [and] the unemployment rate has come down." During the same period, each quarter but one has seen a positive GDP and the unemployment rate has lowered from 10.0 to 7.3 percent.
But that's not the whole story. The second truth is the recovery has been unbalanced. The president acknowledged,
Even though our businesses are creating new jobs and have broken record profits, the top 1 percent of Americans took home 20 percent of the nation's income last year, while the average worker isn't seeing a raise at all. In fact... most of the gains have gone to the top one-tenth of 1 percent.
As a consequence, a recent AP survey found that 80 percent of American adults face unemployment and poverty.
To his credit, the president has consistently spoken about the problem of economic inequality. On December 6, 2011, Obama observed,
This is a make-or-break moment for the middle class, and for all those who are fighting to get into the middle class. Because what's at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, [and] secure their retirement... I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, when everyone plays by the same rules. These aren't Democratic values or Republican values... They're American values.
Since President Obama was inaugurated, Republicans have dogmatically moaned about the Federal deficit, but the third truth is the deficit is decreasing. "Our deficits are now falling at the fastest rate since the end of World War II. Most Americans don't understand this, because the White House has done a terrible job of communicating this event. "By the end of this year, we will have cut our deficits by more than half since I took office."
Yet, despite this progress, the long-term deficit continues to be a problem. The Congressional Budget Office recently reported that
because of government spending cuts and rising tax revenues from the recovering economy, annual deficits will fall in the short term -- to a projected 2.1 percent of the economy's output by the 2015 fiscal year, or about one-fifth of the peak shortfall at the height of the recession in 2009. But starting in 2016, the office projected that deficits will rise again as more aging baby boomers begin drawing from Medicare, Social Security and Medicaid's long-term care benefits.
In 2011, President Obama proposed a "grand bargain" to deal with this looming reality but Speaker of the House John Boehner rejected it.
The fifth truth is that Obamacare is driving down health care costs. "Health care costs are growing at the slowest rate in 50 years." A recent report by the Kaiser Family Foundation confirmed the president's statement. Health and Human Services Secretary Kathleen Sebelius elaborated, "The Affordable Care Act is working to increase transparency and competition among health insurance plans and drive premiums down."
Unfortunately, the sixth and final truth is that while real economic progress has been made since Obama was first elected President, Republicans haven't contributed to it. They haven't been part of the solution but, rather, they've fought Obama at each step and, as a result, become part of the problem. Republicans don't care about protecting the middle class, they are obsessed with defeating President Obama. The president observed, "Republicans in Congress don't seem to be focused on how to grow the economy and build the middle class." He continued, "It's time for [the] Republicans to step up... if folks in this town want a grand bargain, how about a grand bargain for middle class jobs."
In July, President Obama proposed a grand bargain that would have traded lowering the corporate tax rate for additional spending to create middle-class jobs. Speaker John Boehner and Senate Minority Leader Mitch McConnell summarily rejected his proposal.
It's become Obama's economy; he's on his own. Republicans aren't interested in working with the president. They are not interested in protecting the middle class. Republicans are not committed to growing an economy that works for all of us. They are only interested in defending the interests of the top 1 percent.