Economic policy of the Barack Obama administration
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The economic policy of the Barack Obama administration, or "Obamanomics" was characterized by moderate tax increases on higher income Americans, designed to fund
health care reform Health care reform is for the most part governmental policy that affects health care delivery in a given place. Health care reform typically attempts to: * Broaden the population that receives health care coverage through either public sector insu ...
, reduce the federal budget deficit, and decrease
income inequality There are wide varieties of economic inequality, most notably income inequality measured using the distribution of income (the amount of money people are paid) and wealth inequality measured using the distribution of wealth (the amount of we ...
. President Obama's first term (2009–2013) included measures designed to address the
Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
and
subprime mortgage crisis The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. It was triggered by a large decline in US home prices after the col ...
, which began in 2007. These included a major stimulus package, banking regulation, and comprehensive healthcare reform. As the economy improved and job creation continued during his second term (2013–2017), the Bush tax cuts were allowed to expire for the highest income taxpayers and a spending sequester (cap) was implemented, to further reduce the deficit back to typical historical levels. The number of persons without health insurance was reduced by 20 million, reaching a record low level as a percent of the population. By the end of his second term, the number of persons with jobs, real median household income, stock market, and real household net worth were all at record levels, while the unemployment rate was well below historical average.


Overview

President Obama was inaugurated in January 2009, in the depths of the
Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
and a severe
financial crisis A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and man ...
that began in 2007. His administration continued the banking
bailout A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy. A bailout differs from the term ''bail-in'' (coined in 2010) under which the bondholders or depositors of global sys ...
and auto industry
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begun by the previous administration and immediately enacted an $800 billion stimulus program, the
American Recovery and Reinvestment Act of 2009 The American Recovery and Reinvestment Act of 2009 (ARRA) (), nicknamed the Recovery Act, was a stimulus package enacted by the 111th U.S. Congress and signed into law by President Barack Obama in February 2009. Developed in response to the Gr ...
(ARRA), which included a blend of additional spending and tax cuts. By March 2010, the private sector began creating jobs consistently each month, a trend which continued through the end of his tenure, while public sector employment was slower to recover due to budget cuts. President Obama followed with the 2010
Patient Protection and Affordable Care Act The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act and colloquially known as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Pres ...
(ACA), commonly referred to as "Obamacare". By 2016, the law covered approximately 24 million people with health insurance via a combination of state healthcare exchanges and an extension of Medicaid. It lowered the rate of those without health insurance from approximately 16% in 2010 to 9% by 2015. Throughout his tenure, healthcare costs continued to moderate. For example, healthcare premiums for those covered by employers rose by 69% from 2000 to 2005, but only 27% from 2010 to 2015. By 2017, nearly 70% of those on the ACA marketplace exchanges could purchase insurance for less than $75/month after subsidies. The ACA was evaluated multiple times by the
Congressional Budget Office The Congressional Budget Office (CBO) is a List of United States federal agencies, federal agency within the United States Congress, legislative branch of the United States government that provides budget and economic information to Congress. Ins ...
(CBO), which scored it as a moderate deficit reducer, as it included tax hikes primarily on high income taxpayers (roughly the top 5%) and reductions in future Medicare cost increases, offsetting subsidy costs. No Republicans in the House or Senate voted for the law. To address the excesses in the banking sector that precipitated the crisis, Obama signed the 2010
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Rece ...
. This law limited bank risk-taking and overhauled the outdated regulatory regime that was ineffective in monitoring the non-depository or
shadow banking The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations. Examples of NBFIs include hedge funds, i ...
sector at the core of the crisis, which had outgrown the traditional depository banking sector. It also created the
Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mo ...
. However, it did not breakup the largest banks (which had grown even larger due to forced mergers during the crisis) or separate investment and depository banking, as the Glass-Steagal Act had done. Only a few Republicans in Congress voted for the law. During his first two years, President Obama had a majority in the House and the Senate, which coincided with the 111th United States Congress, considered to have been one of the most productive Congresses in terms of legislation passed since the 89th Congress, during Lyndon Johnson's
Great Society The Great Society was a set of domestic programs in the United States launched by Democratic President Lyndon B. Johnson in 1964–65. The term was first coined during a 1964 commencement address by President Lyndon B. Johnson at the Universit ...
. However, in the November 2010 elections, the Republicans won the House majority and reduced the Democratic majority in the Senate. He faced either a split or Republican Congress thereafter, limiting his economic legislation to mainly budgetary matters. The
Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
had caused federal government revenues to fall to their lowest level relative to the size of the economy in 50 years. At the same time, safety net expenditures (including automatic stabilizers such as unemployment compensation and disability payments) and stimulus measures caused expenditures to rise considerably. This drove the budget deficit up, creating significant debt concerns. This resulted in a series of bruising debates with the Republican Congress. President Obama signed the
American Taxpayer Relief Act of 2012 The American Taxpayer Relief Act of 2012 (ATRA) was enacted and passed by the United States Congress on January 1, 2013, and was signed into law by US President Barack Obama the next day. ATRA gave permanence to the lower rates of much of the "Bu ...
, which included the expiration of the Bush tax cuts for high income earners and implemented a sequester (cap) on spending for the military and other discretionary categories of spending. Compared against a baseline where the Bush tax cuts were allowed to expire on schedule in 2010 for all levels of income, it significantly increased future deficits. Compared against the prior years, it significantly reduced the deficit and limited future cost increases. This law and the recovering economy lowered the deficit back to the historical average relative to GDP by 2014. With the economy recovering and major budget legislation behind him, President Obama began to shift to another priority, income and wealth inequality. From 1950 to 1979, the top 1% earned roughly a 10% share of the income. However, this had risen to 24% by 2007, due to a combination of globalization, automation, and policy changes that weakened worker's bargaining position relative to capital (owners). He referred to the widening income gap as the "defining challenge of our time" during 2013.Obama says income inequality is defining challenge for U.S.
''
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.'' December 4, 2013. Retrieved December 26, 2013.
His tax increases on higher-income taxpayers raised their effective tax rates starting in 2013, helping address after-tax income inequality, while job creation remained robust.
Wealth inequality The distribution of wealth is a comparison of the wealth of various members or groups in a society. It shows one aspect of economic inequality or economic heterogeneity. The distribution of wealth differs from the income distribution in that ...
had also risen similarly, with the share of wealth owned by the top 1% rising from 24% in 1979 to 36% by 2007. While U.S. household net worth rose nearly 30% from its pre-crisis peak in 2007 to 2016, much of this gain went to the wealthiest Americans, as it had prior to his tenure. By 2015, the share of wealth owned by the top 1% reached 42%. President Obama also attempted to address inequality before taxes (i.e., market income), with infrastructure investment to create middle-class jobs and a federally-mandated increase in the minimum wage. While the latter was defeated by the Republican Congress, many states did increase their minimum wages, due in part to his support. During late 2015, the House and Senate, in rare bipartisan form, passed the largest infrastructure package in a decade, the Fixing America's Surface Transportation Act. The cumulative changes in several economic variables from the start of his tenure in January 2009 to late 2016 were: Stock markets +180%; Corporate profits +112%; Auto sales +85%; Home prices +24%; Real GDP +15%; Number of jobs +8%; and number of Americans without health insurance -39%. While the annual federal deficit was down 58%, the national debt was up 88%.


Responding to the Great Recession

President Obama's first inauguration was held during the depths of the
Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
. The situation was dire; the economy had lost nearly 3.6 million jobs in 2008 and was shedding jobs at a nearly 800,000 per month rate when he took office. During September 2008, several major financial institutions either collapsed, were forced into mergers, or were bailed-out by the government. The financial system was nearly frozen, as the equivalent of a
bank run A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...
on the essentially unregulated, non-depository
shadow banking The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations. Examples of NBFIs include hedge funds, i ...
system was in-progress.
Ben Bernanke Ben Shalom Bernanke ( ; born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Fed, he was appointed a distinguished fellow at the Brookings Institution. Duri ...
later stated that 12 of the 13 largest U.S. financial institutions were at risk of failure during the crisis. The Bush Administration had passed the $700 billion
Troubled Asset Relief Program The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector that was passed by Congress and signed into law by President ...
in October 2008 and provided enormous loan guarantees to help strengthen the banks as late as January 2009 during the transition period. Further, the U.S. Federal Reserve under
Ben Bernanke Ben Shalom Bernanke ( ; born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Fed, he was appointed a distinguished fellow at the Brookings Institution. Duri ...
was taking a series of innovative emergency steps to inject money into the financial system, acting in their role as the "lender of last resort." Obama and Bernanke agreed that further action was also needed by Congress to help boost the economy beyond Wall Street.


Stimulus

On February 17, 2009, Obama signed into law the
American Recovery and Reinvestment Act of 2009 The American Recovery and Reinvestment Act of 2009 (ARRA) (), nicknamed the Recovery Act, was a stimulus package enacted by the 111th U.S. Congress and signed into law by President Barack Obama in February 2009. Developed in response to the Gr ...
, a $831 billion economic stimulus package aimed at helping the economy recover from the deepening worldwide recession. The act increased federal spending by $573 billion for health care, infrastructure, education and social benefits, with the remainder used for tax relief — including a $116 billion income tax cut that benefited 95% of working families. Democrats overwhelmingly supported this measure, while only a few Senate Republicans supported the law. The CBO estimated ARRA would positively impact GDP and employment, with primary impact between 2009 and 2011. It projected an increase in the GDP of between 1.4 and 3.8% by late 2009, 1.1 and 3.3% by late 2010, and 0.4 and 1.3% by late 2011, as well as a decrease of between zero and 0.2% beyond 2014. The impact to employment would be an increase of 0.8 million to 2.3 million by last-2009, an increase of 1.2 million to 3.6 million by late 2010, an increase of 0.6 million to 1.9 million by late 2011, and declining increases in subsequent years as the U.S. labor market reaches nearly full employment, but never negative. The CBO estimated that enacting the bill would increase federal budget deficits by $185 billion over the remaining months of fiscal year 2009, $399 billion in 2010, and $134 billion in 2011, or $787 billion over the 2009–2019 period. The Congressional Budget Office and a broad range of economists credit Obama's stimulus plan for economic growth. The CBO's final analysis in February 2015 found that ARRA provided substantial improvement to GDP growth and employment. Although an April 2010 survey of members of the
National Association for Business Economics The National Association for Business Economics (NABE) is the largest international association of applied economists, strategists, academics, and policy-makers committed to the application of economics. Founded in 1959, it is one of the member o ...
(NABE) showed an increase in job creation (over a similar January survey) for the first time in two years, 73% of the 68 respondents believed that the stimulus bill had no impact on employment at their company after one year of ARRA's enactment. The economy of the United States has grown faster than the other original NATO members by a wider margin under President Obama than it has anytime since the end of
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...
. The OECD credits the much faster growth in the United States to the stimulus in the United States, in contrast to the austerity measures taken in the European Union. The
Council of Economic Advisers The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the President of the United States on economic policy. The CEA provides much of the empirical rese ...
produced a comprehensive report on the ARRA in 2014, which includes a variety of graphics illustrating the positive effect on both GDP and jobs. It also covers the allocation of spending and tax cuts contained in the legislation.


U.S. automobile industry support

Obama intervened in the troubled automotive industry in March 2009, renewing loans for
General Motors The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...
and
Chrysler Stellantis North America (officially FCA US and formerly Chrysler ()) is one of the " Big Three" automobile manufacturers in the United States, headquartered in Auburn Hills, Michigan. It is the American subsidiary of the multinational automotiv ...
to continue operations while reorganizing. Over the following months, the White House set terms for both firms' bankruptcies, including the sale of Chrysler to Italian automaker
Fiat Fiat Automobiles S.p.A. (, , ; originally FIAT, it, Fabbrica Italiana Automobili di Torino, lit=Italian Automobiles Factory of Turin) is an Italian automobile manufacturer, formerly part of Fiat Chrysler Automobiles, and since 2021 a subsidiar ...
and a reorganization of General Motors giving the U.S. government a temporary 60% equity stake in the company, with the Canadian government taking a 12% stake. In June 2009, dissatisfied with the pace of economic stimulus, Obama called on his cabinet to accelerate the investment. By late 2013, the Federal Government had disposed of (re-privatized) all of its investments in Chrysler and GM. As of late 2016, taxpayers had recovered $71 billion of the $80 billion invested in the automobile industry. According to a study by the Center for Automotive Research, the bailout saved 2.63 million jobs and saved or avoided the loss of $105 billion in transfer payments and the loss of personal and social insurance tax collection. Auto and light truck production pre-crisis of 2007 was 16.0 million units, fell to 10.4 million units at the trough of the Great Recession in 2009, then steadily rebounded to 18.3 million by December 2016. He also signed into law the
Car Allowance Rebate System The Car Allowance Rebate System (CARS), colloquially known as "cash for clunkers", was a $3 billion U.S. federal scrappage program intended to provide economic incentives to U.S. residents to purchase a new, more fuel-efficient vehicle whe ...
program, also known as "Cash for Clunkers."


Trends in employment

Approximately 8.7 million private sector jobs were lost between January 2008 and February 2010 due to the Great Recession. The unemployment rate (U-3) began rising from 4.7% in November 2007 and peaked at 10.0% in October 2009 as the crisis deepened, approximately where it remained until November 2010. Another measure of unemployment (U-6), which includes workers marginally attached to the labor force and those employed part-time for economic reasons, rose from 8.4% in November 2007 and peaked at 17.1% in November 2009, approximately where it remained until November 2010. Thereafter, it began a steady decline until reaching 9.4% in January 2017. Measured from the month following his inauguration in January 2009, the U.S. added 11.6 million private sector jobs from February 2009 to January 2017. Measured from the crisis trough in February 2010, the U.S. added a total of 16.1 million private sector jobs over the remaining 83 months of the Obama presidency — the longest continuous period of private sector job creation on record. By comparison, no net jobs were added during the 2000–2009 period including the crisis impact, while 18 to 22 million jobs were added each decade from 1970 to 1999. Non-farm job creation averaged approximately 200,000/month for 73 months from October 2010 to October 2016, a robust rate by historical standards. For example, job creation per month averaged 236,000 (Clinton), 209,000 (Carter), 167,000 (Reagan), 50,000 (G. H. W. Bush), and 13,000 (G. W. Bush). The 2017 '
Economic Report of the President The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the President of the United States on economic policy. The CEA provides much of the empirical resea ...
'' stated, "Nonfarm job growth turned consistently positive beginning in October 2010. Since then, the U.S. economy has added jobs for 74 straight months, the longest streak of total job growth on record; over this period, nonfarm employment growth has averaged 199,000 jobs a month. Total nonfarm employment recovered to its pre-recession peak in 2014—the best year for job creation since the 1990s—and, as of November 2016, exceeded its pre-recession peak by 6.7 million jobs." The
Congressional Budget Office The Congressional Budget Office (CBO) is a List of United States federal agencies, federal agency within the United States Congress, legislative branch of the United States government that provides budget and economic information to Congress. Ins ...
(CBO) estimated the size of an employment shortfall, defined as the number of workers below a
full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. F ...
level. This shortfall steadily improved during Obama's tenure, from approximately 10 million in 2010 to 2.5 million as of December 2015, a figure roughly 1.5% of the 160 million person labor force. As the economy recovered towards full employment, a reduced
labor force participation rate Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refer ...
among prime working-aged persons (between ages 25 to 54 years old) accounted for a greater share of the shortfall. The overall labor force participation rate had been falling since 2000, as the country ages. In December 2015, the
Bureau of Labor Statistics The Bureau of Labor Statistics (BLS) is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics and serves as a principal agency of ...
(BLS) reported the reasons why persons aged 16 years or older were outside the labor force, using the 2014 figure of 87.4 million: 1) Retired: 38.5 million or 44%; 2) Disabled or Illness: 16.3 million or 19%; 3) Attending School: 16.0 million or 18%; 4) Home Responsibilities: 13.5 million or 15%; and 4) Other Reasons: 3.1 million or 5%. As of November 2016, BLS estimated that 90 million of the 95 million people outside the labor force indicated they "do not want a job now." During the Obama presidency, critics asserted that his policies (particularly the ACA) were destroying full-time employment and creating "Obama's Part-Time America." However, from the month ACA was enacted in March 2010 to the end of the Obama presidency, full-time employment increased 12.5%, voluntary part-time employment (those who normally seek part-time work) declined 1.0%, and involuntary part-time employment (those who want full-time work but must settle for part-time) declined 35.4%.


Banking regulation

To address the excesses in the banking sector that precipitated the crisis, Obama signed into law the
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Rece ...
of 2010, which limited bank risk-taking and overhauled the outdated regulatory regime that was ineffective in monitoring the non-depository or
shadow banking The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations. Examples of NBFIs include hedge funds, i ...
sector at the core of the crisis, which had outgrown the traditional depository banking sector. It also created the
Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mo ...
(CFPB). However, it did not breakup the largest banks (which had grown even larger due to forced mergers during the crisis) or separate investment and depository banking, as the Glass-Steagal Act had done. Nearly all Congressional Democrats but only a few Republicans voted for the law. On December 10, 2014, the President himself, together with JP Morgan's Jamie Dimon, helped whip House votes in favor of the "cromnibus" spending bill, which included a provision that one lawmaker argued would significantly weaken the Dodd-Frank regulations.


Recovery

The
Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
of 2007-2009 was different in kind from all the recessions since the Great Depression, as it also involved a banking crisis and the de-leveraging (debt reduction) of highly indebted households. Research indicates recovery from financial crises can be protracted, with lengthy periods of high unemployment and substandard economic growth. Economist
Carmen Reinhart Carmen M. Reinhart (née Castellanos, born October 7, 1955) is a Cuban-American economist and the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School. Previously, she was the Dennis Weatherstone Senior Fe ...
stated in August 2011: "Debt de-leveraging eductiontakes about seven years ... And in the decade following severe financial crises, you tend to grow by 1 to 1.5 percentage points less than in the decade before, because the decade before was fueled by a boom in private borrowing, and not all of that growth was real. The unemployment figures in advanced economies after falls are also very dark. Unemployment remains anchored about five percentage points above what it was in the decade before." Several key economic variables (e.g., Job level, real GDP per capita, household net worth, and the federal budget deficit) hit their low point (trough) in 2009 or 2010, after which they began to turn upward, recovering to pre-recession (2007) levels between late 2012 and May 2014, which marked the recovery of all jobs lost during the recession. Real median household income fell to a trough of $53,331 in 2012, but recovered to an all-time high of $59,039 by 2016. The Great Recession had a particularly severe effect on state and local tax receipts, causing many states and localities to reduce spending and employment to balance budgets as mandated by their constitutions or statutes. This government contraction subtracted from real GDP growth, creating an economic drag, rather than government adding to real GDP as is typical. Obama noted this in June 2012, saying, "The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government -- oftentimes, cuts initiated by governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in."


Healthcare reform

President Obama followed with the legislation that bears his name ("Obamacare"), the
Patient Protection and Affordable Care Act The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act and colloquially known as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Pres ...
of 2010. It was built on three related concepts, including: 1) Subsidies for low-income persons to help them purchase health insurance; 2) Guaranteed issue and community rating, meaning persons with pre-existing medical conditions could not be discriminated against; and 3) Coverage requirements, enforced via both individual and employer "mandates" with financial incentives supporting them, to ensure healthy people (with few medical bills) would participate to help keep insurance costs down for all. While the law received no Republican Congressional support, it was conceptually similar to the healthcare plan created by the conservative
Heritage Foundation The Heritage Foundation (abbreviated to Heritage) is an American conservative think tank based in Washington, D.C. that is primarily geared toward public policy. The foundation took a leading role in the conservative movement during the preside ...
during the late 1980s and Romneycare. Healthcare historian Paul Starr said in December 2017, "If you trace the origins of the ideas in the ACA, it was basically a bi-partisan bill passed on strictly partisan lines." By creating state-level marketplaces or exchanges, enough people could form pools to obtain cost-effective coverage. Furthermore, the law provided federal funding for states that chose to expand their Medicaid programs. The vast majority of congressional Democrats voted for the law, while no Republicans in the House or Senate did so. Republicans, mainly in the House of Representatives, attempted on as many as 60 occasions to repeal, defund, or delay the law during Obama's tenure, but to no avail.


Coverage

By 2016, the law covered approximately 24 million people with health insurance via a combination of state healthcare exchanges and funding for the state-level expansion of Medicaid to more people. It lowered the rate of those without health insurance from approximately 16% in 2010 to 9% by 2015. Poltifact cited various estimates that only about 2% of the total insured population (4 million out of 262 million) received notices that substandard policies would have to be changed, even though Obama was roundly criticized for claims that "if you like your health plan, you can keep it." However, despite federal financial incentives to do so, many states with Republican governors chose not to expand Medicaid to their residents under the ACA, which adversely affected coverage for lower-income citizens while reducing costs. According to the
Urban Institute The Urban Institute is a Washington, D.C.–based think tank that carries out economic and social policy research to "open minds, shape decisions, and offer solutions". The institute receives funding from government contracts, foundations and pr ...
, those states that expanded Medicaid (32 of them, including Washington, D.C.) had a 7.3% uninsured rate in the first quarter of 2016, while those that did not (19 states) had a 14.1% uninsured rate among adults between the ages of 18 and 64 years old.


Healthcare costs

Throughout his tenure, healthcare costs continued to moderate. For example, healthcare premiums for those covered by employers rose by 69% from 2000 to 2005, but only by 27% from 2010 to 2015. To put these trends into perspective, the 2017 ''Economic Report of the President'' stated, While these slower cost increases began before the ACA, they continued or further improved after its implementation. The ACA also provided subsidies to help lower-income families afford insurance. By 2017, nearly 70% of those on the exchanges could purchase insurance for less than $75/month after subsidies. CBO estimated that subsidies paid under the law in 2016 averaged $4,240 per person for 10 million people receiving them, roughly $42 billion. For scale, the subsidy for the employer market, in the form of exempting from taxation those health insurance premiums paid on behalf of employees by employers, was approximately $1,700 per person in 2016, or $266 billion for the 155 million persons in the employer market. The employer market subsidy was not changed by the law.


Budgetary impact

The law was evaluated multiple times by the
Congressional Budget Office The Congressional Budget Office (CBO) is a List of United States federal agencies, federal agency within the United States Congress, legislative branch of the United States government that provides budget and economic information to Congress. Ins ...
, which scored it as a moderate deficit reducer, as it included tax hikes primarily on high income taxpayers (over $200,000 roughly the Top 5%) and reductions in future Medicare cost increases, offsetting subsidy costs. The CBO also reported in June 2015 that, "Including the budgetary effects of macroeconomic feedback, repealing the ACA would increase federal budget deficits by $137 billion over the 2016–2025 period." CBO also estimated that excluding the effects of macroeconomic feedback, repeal of the ACA would increase the deficit by $353 billion over that same period. The ''2017 Economic Report of the President'' also stated that ACA has improved healthcare quality, saying


Public opinion

According to Gallup, the overall popularity of the law fell and then improved during Obama's tenure, but more disapproved of it (52%) than approved of it (44%) as of November 2016. Popularity was divided along party lines, with Democrats having a much more favorable view of the law. Individual elements were considerably more popular than the law overall, even though the mandate requiring people to have insurance remained highly unpopular.


Control of Congress

During his first two years, President Obama had a majority in the House and
filibuster A filibuster is a political procedure in which one or more members of a legislative body prolong debate on proposed legislation so as to delay or entirely prevent decision. It is sometimes referred to as "talking a bill to death" or "talking out ...
-proof super-majority in the Senate (until February 2010), which coincided with the 111th United States Congress, considered to have been one of the most productive Congresses in terms of legislation passed since the 89th Congress, during Lyndon Johnson's
Great Society The Great Society was a set of domestic programs in the United States launched by Democratic President Lyndon B. Johnson in 1964–65. The term was first coined during a 1964 commencement address by President Lyndon B. Johnson at the Universit ...
. However, in the November 2010 elections, the Republicans won the House majority and reduced the Democratic majority in the Senate. The
112th United States Congress The 112th United States Congress was a meeting of the legislative branch of the United States federal government, from January 3, 2011, until January 3, 2013. It convened in Washington, D.C. on January 3, 2011, and ended on January 3, 2013, 17 ...
(January 2011 to January 2013) was able to block many of President Obama's other legislative plans, resulting in one of the least productive Congresses since World War 2, with record low approval ratings. Obama faced a highly unpopular split or Republican Congress thereafter. According to a Gallup Poll released in August 2014, the
113th Congress The 113th United States Congress was a meeting of the legislative branch of the United States federal government, from January 3, 2013, to January 3, 2015, during the fifth and sixth years of Barack Obama's presidency. It was composed of the ...
had the highest disapproval rating of any Congress since 1974, when data first started being collected: 83% of Americans surveyed said that they disapproved of the job Congress was doing, while only 13% said that they approved. The 112th and later Congresses limited Obama's legislative accomplishments to primarily budgetary matters.


The federal budget debates

The Great Recession had caused federal government revenues to fall to their lowest level relative to the size of the economy for 50 years, with tax revenues falling nearly $400 billion (20%) between 2008 and 2009. At the same time, safety net spending caused expenditures to rise considerably. For example,
automatic stabilizer In macroeconomics, automatic stabilizers are features of the structure of modern government budgets, particularly income taxes and welfare spending, that act to damp out fluctuations in real GDP. The size of the government budget deficit tends to ...
spending (such as unemployment compensation,
food stamps In the United States, the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is a federal program that provides food-purchasing assistance for low- and no-income people. It is a federal aid program, ad ...
, and disability payments, which increased without legislative action) ranged between $350–420 billion annually from 2009 to 2012, roughly 10% of the expenditures. The combination of higher outlays and lower receipts drove the budget deficit up even without any policy steps by President Obama, creating significant debt concerns. This resulted in a series of bruising debates with the Republican Congress, which attempted (with much success) to blame the President for the deficits caused primarily by the recession that began during the Bush administration. One incident illustrates the nature and tensions of the debate. The U.S. added $1.0 trillion to the national debt in fiscal year (FY) 2008, which ended in September 2008. The
Congressional Budget Office The Congressional Budget Office (CBO) is a List of United States federal agencies, federal agency within the United States Congress, legislative branch of the United States government that provides budget and economic information to Congress. Ins ...
projected two weeks prior to Obama's first inauguration that the deficit in FY 2009 (a year budgeted by President Bush) would be $1.2 trillion and that the debt increase over the following decade would be $3.1 trillion assuming the expiration of the Bush tax cuts as scheduled in 2010, or around $6.0 trillion if the Bush tax cuts were extended at all income levels. Adjusting other assumptions in the CBO baseline could have raised that debt level even higher. In response to Republican criticism, President Obama claimed, a claim which Politifact rated as "Mostly True." President Obama had pledged not to raise taxes except on high income taxpayers, so his debt figure included the extension of the Bush tax cuts for most taxpayers. These facts did not stop Republicans from blaming the President for the ensuing debts during his administration. ''The Balance'' used three scenarios for describing the debt addition during the Obama Administration: #Debt added from when Obama was inaugurated January 20, 2009 ($10.6 trillion) to when he left office on January 20, 2017 ($20.0 trillion), an increase of $9.4 trillion. This calculation simply compares two points in time and does not analyze cause. #Sum of the annual deficits in fiscal years budgeted by Obama (fiscal years 2010 to 2017), which totaled $6.5 trillion using the CBO historical tables. This also does not analyze cause. #Measuring the debt added by Obama's policies, primarily the extension of the Bush tax cuts ($860 billion) and the ARRA stimulus ($800 billion). Within a month of the 2010 midterm elections, Obama announced a compromise deal with the Congressional Republican leadership that included a temporary, two-year extension of the 2001 and 2003 income tax rates, a one-year
payroll tax Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the em ...
reduction, continuation of unemployment benefits, and a new rate and exemption amount for
estate taxes An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and property) of a person who has died. International tax law distinguishes between an es ...
. The compromise overcame opposition from some in both parties, and the resulting $858 billion
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (), also known as the 2010 Tax Relief Act, was passed by the United States Congress on December 16, 2010, and signed into law by President Barack Obama on Decembe ...
passed with bipartisan majorities in both houses of Congress before Obama signed it on December 17, 2010.


Debt ceiling crises

On August 2, 2011, after a lengthy congressional debt limit debate, Obama signed into law the bipartisan
Budget Control Act of 2011 The Budget Control Act of 2011 () is a federal statute enacted by the 112th United States Congress and signed into law by US President Barack Obama on August 2, 2011. The Act brought conclusion to the 2011 US debt-ceiling crisis. The law in ...
, which enforced limits on discretionary spending until 2021 (the "sequester"), established a procedure to increase the debt limit, created a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years, and established automatic procedures for reducing spending by as much as $1.2 trillion if legislation originating with the new joint select committee does not achieve such savings. By passing the legislation, the U.S. was able to prevent a U.S. government default on its obligations, as Congressional Republicans had initially refused to raise the debt ceiling. President Obama referred to the situation as a "manufactured crisis", while Senate Minority Leader
Mitch McConnell Addison Mitchell McConnell III (born February 20, 1942) is an American politician and retired attorney serving as the senior United States senator from Kentucky and the Senate minority leader since 2021. Currently in his seventh term, McCon ...
called it "a new template... aisingthe debt ceiling will not be clean anymore." The Republicans attempted to use the debt limit as a bargaining chip again in 2013, resulting in another debt ceiling crisis, which was resolved with minor legislation.


Tax policy

President Obama pledged before he was elected not to raise taxes except on those couples earning over $250,000 (200,000 for individuals). With the Bush tax cuts extension scheduled to expire in January 2013, Obama had significant leverage with the Republican Congress, as his veto of further extensions would have resulted in a sizable income tax increase across the income spectrum, a significant expansion of government, but contrary to his pledge. His compromise, the
American Taxpayer Relief Act of 2012 The American Taxpayer Relief Act of 2012 (ATRA) was enacted and passed by the United States Congress on January 1, 2013, and was signed into law by US President Barack Obama the next day. ATRA gave permanence to the lower rates of much of the "Bu ...
(ATRA), passed by a wide majority in the Senate, with both Democrats and Republicans supporting it, while a majority of Republicans in the House opposed it. It extended the Bush tax cuts for roughly the bottom 99% of income earners (those earning below $400,000, or $450,000 for married couples). Capital gains, dividends, and estate tax rates were also increased relative to the 2003–2012 levels; these also mainly affect high-income and wealthy households. It was estimated to increase revenues by $600 billion over a decade, roughly one-fifth of the amount if the tax cuts had been allowed to expire at all income levels. Stated another way, it extended roughly 80% of the Bush tax cuts indefinitely. Separately enacted as part of Obamacare, individual mandates and tobacco taxes impacted the middle class slightly, although they were mainly designed to adjust behavior rather than gather revenue. ATRA reduced the deficit trajectory significantly relative to the CBO "Alternative baseline" or "current policy" baseline of March 2012, which projected $10.7 trillion in deficit increases (debt) over the 2013-2022 decade. That baseline assumed the Bush tax cuts and other tax cuts would again be extended at all levels and that the discretionary spending sequester negotiated as part of the Budget Control Act of 2011 would not be implemented. The February 2013 (post ATRA) CBO baseline had deficit increases of $6.8 trillion over a decade, so ATRA reduced these deficits by approximately $3.9 trillion relative to current policies. However, measured another way, relative to the CBO August 2012 "current law baseline" (which assumed deficits would total $2.3 trillion over a decade via the expiration of the Bush tax cuts at all levels, several other tax increases, and implementation of the sequester) ATRA raised the deficit by $4.5 trillion. The CBO had forecast that cutting the deficit towards the current law baseline would have a significant risk of recession in 2013 along with higher unemployment, so a more moderate trajectory was chosen by the President and Congress.


Trends in deficits and debt

Federal spending increased significantly from $3.0 trillion in FY2008 to $3.5 trillion in FY 2009, the last fiscal year budgeted by President Bush. This increase was mainly driven by the Great Recession, with significant increases in automatic stabilizers such as unemployment insurance and food stamps. Spending then roughly stabilized at that dollar level through 2015. For instance, 2014 spending of $3,506B was slightly below the 2009 level of $3,517B. Throughout 2015, the U.S. federal government spent $3.7 trillion, around the historical average relative to the size of the economy at 20.7% GDP. Projecting 2008 spending forward at the historical 5% rate, by 2015 federal spending was $500 billion below trend. Spending rose to $4.0 trillion or 20.8% GDP in FY2017, the last year budgeted by President Obama. The budget deficit reached 9.8% GDP in 2009 in the depths of the recession, before steadily recovering to below the 3.0% GDP historical average (1970-2013) in 2014 (2.8% GDP) and 2015 (2.4% GDP). Federal spending per person rose approximately from $9,800 in 2008 to $11,440 in 2009 mainly due to the Great Recession, then declined somewhat (the first reduction since 1960) and remained relatively flat through 2015 at $11,480. It rose steadily thereafter to $12,217 in FY2017. The national debt increased from $10.0 trillion in September 2008 to $19.6 trillion in September 2016. As described above, roughly $3 trillion of this increase was anticipated in the January 2009 CBO baseline forecast, or $6–8 trillion adjusting for the extension of the Bush tax cuts and other baseline overrides typically legislated. Obama ultimately extended the Bush tax cuts for approximately 98% of taxpayers as part of the
American Taxpayer Relief Act of 2012 The American Taxpayer Relief Act of 2012 (ATRA) was enacted and passed by the United States Congress on January 1, 2013, and was signed into law by US President Barack Obama the next day. ATRA gave permanence to the lower rates of much of the "Bu ...
, allowing taxes to rise on the top 1–2% of income earners. This extension represented about 80% of the dollar value of the tax cuts. The debt held by the public (which excludes intra-governmental liabilities like the Social Security Trust Fund) rose from around 36% GDP in 2009 to 76% GDP in 2016, the highest level except for the post World War 2 era. Upon taking office, the Obama administration eliminated four budgeting gimmicks the Bush administration had used to underestimate deficits, causing reported deficits to increase by $2.7 trillion over the coming decade.


Summary of major budgetary legislation

President Obama signed four key laws that significantly impacted the level of revenue and spending: #The
American Recovery and Reinvestment Act of 2009 The American Recovery and Reinvestment Act of 2009 (ARRA) (), nicknamed the Recovery Act, was a stimulus package enacted by the 111th U.S. Congress and signed into law by President Barack Obama in February 2009. Developed in response to the Gr ...
, an $800 billion stimulus spending and tax cut bill; #The
Patient Protection and Affordable Care Act The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act and colloquially known as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Pres ...
, also known as Obamacare, which CBO estimated would increase revenues and spending in approximately equal amounts; #The
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (), also known as the 2010 Tax Relief Act, was passed by the United States Congress on December 16, 2010, and signed into law by President Barack Obama on Decembe ...
, an $850 billion bill with payroll, income, and AMT tax cuts along with an extension of unemployment benefits; and #The
American Taxpayer Relief Act of 2012 The American Taxpayer Relief Act of 2012 (ATRA) was enacted and passed by the United States Congress on January 1, 2013, and was signed into law by US President Barack Obama the next day. ATRA gave permanence to the lower rates of much of the "Bu ...
, which included the expiration of the Bush tax cuts for high income earners and implemented a sequester (cap) on spending for the military and other discretionary categories of spending. Compared against a baseline where the Bush tax cuts were allowed to expire for all levels of income, it significantly increased future deficits. Compared against the prior year, it significantly reduced the deficit and avoided some future cost increases. Obama inherited a highly ambiguous fiscal outlook, with several important tax laws scheduled to expire during his first term in office, not to mention uncertainty regarding the depth of the financial crisis and Great Recession. These laws included the Bush tax cuts of 2001 and 2003 (scheduled to expire in 2010) and temporary "patches" that prevented the alternative minimum tax from impacting the middle class. This ambiguity resulted in the CBO publishing a second "alternative fiscal scenario" during 2009 to help explain the consequences of making this tax relief permanent over the following decades. This ambiguity culminated in the
United States fiscal cliff The United States fiscal cliff refers to the combined effect of several previously-enacted laws that came into effect simultaneously in January 2013, increasing taxes and decreasing spending. The Bush tax cuts of 2001 and 2003, which had been e ...
and was addressed by the latter two laws listed above, such that the CBO returned to publishing just one fiscal scenario by 2016.


Addressing income inequality

With the economy recovering and major budget legislation behind him, President Obama began to shift to another priority, income and wealth inequality. From 1950 to 1979, the top 1% earned roughly a 10% share of the market or pre-tax income. However, this had risen to 24% by 2007, due to a combination of globalization, automation, and policy changes that weakened labor's bargaining position relative to capital. Further, the
Center for American Progress The Center for American Progress (CAP) is a public policy research and advocacy organization which presents a liberal viewpoint on economic and social issues. It has its headquarters in Washington, D.C. The president and chief executive offic ...
estimated that 76% of the real income gains between 2009 and 2013 went to the top 1%. In December 2013, Obama declared that growing income inequality is a "defining challenge of our time" and called on Congress to bolster the safety net and raise wages. This came on the heels of the nationwide strikes of fast-food workers and
Pope Francis Pope Francis ( la, Franciscus; it, Francesco; es, link=, Francisco; born Jorge Mario Bergoglio, 17 December 1936) is the head of the Catholic Church. He has been the bishop of Rome and sovereign of the Vatican City State since 13 March 2013 ...
' criticism of inequality and
trickle-down economics Trickle-down economics is a term used in critical references to economic policies that favor the upper income brackets, corporations, and individuals with substantial wealth or capital. In recent history, the term has been used by critics of ...
. Income inequality can be addressed by pre-tax (market) income policies ("pre-distribution") that raise worker pay, as well as after-tax policies that raise taxes on higher-income taxpayers to fund transfers to lower-income taxpayers ("redistribution"). President Obama attempted both strategies, with some success in reducing both the pre-tax and after-tax share of income of the top 1% measured 2012 to 2013 (the most recent CBO data available as of December 2016), which means the share of income of the bottom 99% increased. An alternate data series, from economists Piketty, Saez, and Zucman (that includes 2014 data) also indicated that the income share of the top 1% both pre-tax and after-tax was ''lower'' in 2014 than 2012, indicating improved inequality. However, they also found the share of both pre-tax and after-tax income of the top 1% was slightly ''higher'' in 2014 than 2007.


Redistribution

Obama increased taxes on high-income taxpayers via: a) expiration of the Bush income tax cuts for the top 1–2% of income earners starting with 2013; and b) payroll tax increases on roughly the top 5% of earners as part of the ACA. This increased the average tax rate paid by the top 1% (incomes above $443,000 in 2015) from 28% in 2012 to 34% in 2013. According to the CBO, after-tax income inequality improved, by lowering the share of after-tax income received by the top 1% from 16.7% in 2007 to 15.1% in 2012 and to 12.4% in 2013. The bottom 99% also saw an average federal tax rate increase by one percentage point from 2012 to 2013, mainly due to the expiration of the Obama payroll tax cuts, which were in place in 2011 and 2012. However, for income groups in the bottom 99%, the average federal tax rate remained at or below the 2007 level. ''Politifact'' rated the claim that Obama had cut taxes for middle-class families and small businesses as "Mostly True" in 2012. In addition, the ACA Medicaid expansion (10 million persons in 2016) and subsidies (approximately 10 million persons received a total of $42 billion in 2016, or about $4,200 each) also served to address after-tax income inequality, by transferring money and providing health insurance to lower-income citizens. A 2016 report from the Obama Administration claimed that "Tax changes enacted since 2009 have boosted the share of after-tax income received by the bottom 99 percent of families by more than the tax changes of any previous Administration since at least 1960."


Predistribution

President Obama also attempted to address inequality before taxes (i.e., market income), with an increase in the minimum wage and infrastructure investment. While the Republican Congress did not support a federally-mandated increase in the minimum wage, 18 states did increase their minimum wages, benefiting an estimated 7 million workers, following the President's 2013 State of the Union speech calling for an increase. During late 2015, the House and Senate, in rare bipartisan form, passed the largest infrastructure package in a decade, costing $305 billion over five years, less than the $478 billion in Obama's initial request. He signed the Fixing America's Surface Transportation Act into law in December 2015. Obama also issued several executive orders and his administration issued regulatory rulings designed to help workers. One included raising the salary threshold above which employers do not have to pay overtime, from $455 to $913 per week. This would have increased the earnings of as many as 4.2 million workers beginning December 1, 2016, but it was blocked by a federal judge. The Labor Department also issued guidelines for employers on whether to treat contractors as employees; the latter receive additional pay and benefits. President Obama also issued executive orders to raise pay at companies that receive government contracts. According to the CBO, the top 1% received 18.7% of the pre-tax income in 2007, but 17.3% in 2012 and 15.0% in 2013. This indicated some progress on pre-tax inequality as well.


Wealth inequality

Wealth inequality had also risen similarly, with the share of wealth owned by the top 1% rising from 24% in 1979 to 36% by 2007. While U.S. household net worth rose nearly 30% from its pre-crisis peak in 2007 to 2016, much of this gain went to the wealthiest Americans, as it had prior to his tenure. By 2015, the share of wealth owned by the top 1% reached 42%. However, the share of wealth owned by the bottom 50% fell from 2.9% in 1979 to 2.6% in 2007 and 1.1% in 2015, as the crisis did additional damage to highly leveraged households that had purchased homes with low down-payments.


Trade

President Obama has urged Congress to ratify a 12-nation free trade pact called the
Trans-Pacific Partnership The Trans-Pacific Partnership (TPP), or Trans-Pacific Partnership Agreement, was a highly contested proposed trade agreement between 12 Pacific Rim economies, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Pe ...
. In theory, free trade enables economies to focus on those products where they have
comparative advantage In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. C ...
, making both economies better off. While trade maximizes the overall outcome, specific groups are helped or hurt by trade. Due to a backlash against globalization in both the U.S. and Europe by working-class voters, several politicians in the 2016 U.S. election expressed their opposition to the deal. The trade deficit (imports greater than exports) fell dramatically as a result of the Great Recession, falling from a 2006 pre-crisis record peak of $802 billion to $380 billion by 2009. During Obama's presidency, the trade deficit moved in a range between approximately $400 and $500 billion.


Economic results summary

The economic performance during the Obama administration can be measured by analyzing several key variables: Analysis conducted by
Bloomberg News Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg T ...
in January 2019 found that the Obama economy after two years ranked second among the seven presidents from 1977 to 2019, based on fourteen metrics of economic activity and financial performance.


Overall

*Economic growth, measured as the change in real GDP, averaged 2.0% from Q2 2009 to Q4 2016. This was slower than the 2.6% average from Q1 1989 to Q4 2008. Real GDP grew nearly 3% during President Bush's first term but only 0.5% during his second. During the Clinton administration, the GDP growth was close to 4%, slightly faster than the Reagan administration. *Real GDP rose from $14.4 trillion in Q1 2009 to $16.8 trillion in Q4 2016, a cumulative increase of $2.4 trillion or 16.6%. Real GDP per capita rose from $46,930 in 2009 to $51,523 in 2016 (a record level), an increase of $4,593 or 9.7%. *Inflation (measured by CPI-All Urban Consumers, All Items) fell to a historically low level during his administration, averaging 1.4% from Q2 2009 to Q4 2016, well below the 3.0% average from Q1 1989 to Q4 2008. *Interest rates also fell and remained very low. The yield on the 10-year Treasury bond averaged 2.4% from Q2 2009 to Q4 2016, well below the 5.8% average from Q1 1989-Q4 2008. *The debt held by the public rose from $6.3 trillion on January 31, 2009, to $14.4 trillion on December 31, 2016, an increase of $8.1 trillion or 128%. Measured as a % GDP, it rose from 52.3% GDP in 2009 to 76% GDP by 2016. As described above, most of the debt increase was inherited from the prior administration (e.g., tax cuts and wars) or was due to the Great Recession (e.g., declining revenue and higher automatic stabilizer spending), as opposed to Obama's policies. *The national debt (the debt held by the public plus intra-governmental debt) rose from $10.6 trillion on January 31, 2009, to $20.0 trillion on December 31, 2016, an increase of $9.4 trillion or 88%. * Obama presided over the third longest economic expansion among the 33 expansions tracked since records began in 1857, and the longest continuous stretch of private sector job creation since records began in 1939.


Labor market

*The number of civilian persons employed rose from 142.1 million in January 2009 to 152.1 million by December 2016, an increase of 10.0 million or 7.0%. *The unemployment rate (U-3), rose during the Great Recession to peak at 10.0%, then fell back towards full employment by the end of his two terms to 4.7%, similar to 2007 pre-crisis levels during the Bush administration, and well-below the historical average of 5.8%. The wider U-6 rate, which includes marginally attached and those working part-time for economic reasons, followed a similar path to peak at 17.1%, but ended slightly above the pre-crisis levels at 9.2%. *The ratio of employed to civilian population ("EM Ratio") for the prime working age group (ages 25 to 54) fell from around 80% pre-crisis to 75% by early 2010, then steadily recovered to 78% by 2016. However, the labor force participation rate ("LFPR") for that group continued a long-term downward trend, falling from around 83% pre-crisis to 81% during Obama's tenure. *Between 2014 and 2015, real median household income grew 5.2%, or $2,800, the fastest growth on record. Contrary to prior trends, these gains were widely shared across the income distribution. *The 2017 ''Economic Report of the President'' stated that: "Since the end of 2012, private production and non-supervisory workers, who comprise about 80 percent of private-sector employment, have seen their real hourly earnings increase by 5.3 percent, more than the total cumulative real wage gains for these workers from 1980 to 2007. Overall, real hourly wage growth since the business cycle peak in December 2007 has averaged 0.8 percent a year for these workers, the fastest growth of any business cycle (measured peak-to-peak) since the 1970s." *The percent of persons aged 25 or older with a bachelor's degree or higher increased from 27.7% in 2008 to 30.1% in 2016.


Households

*Real median household income reached a record level of $59,039 by 2016, after recovering from a trough of $53,331 in 2012. The $2,800 or 5.2% increase between 2014 and 2015 was the largest one-year increase since the government started keeping track in 1968, and was followed by a 3.2% increase between 2015 and 2016. *U.S. household and non-profit net worth also reached record highs, growing from $54.4 trillion in Q1 2009 to $92.8 trillion by Q4 2016, an increase of 70%, driven primarily by record stock and bond prices. Measured from the pre-crisis peak of $67.7 trillion in Q2 2007, it increased 37%. *U.S. households significantly reduced their debt burden, from a peak of 99% GDP in 2008 to 80% by Q4 2016, as they increased savings to pay off mortgages or lost their homes to foreclosure in the Great Recession. This debt reduction ("deleveraging") was a headwind to the recovery through much of President Obama's tenure. In contrast, during the Bush administration, households had increased their debt burden dramatically, which boosted the economy but later proved unsustainable. *The official poverty rate in 2015 was 13.5%, down from 14.8% in 2014 but up from 12.5% in 2007, as the economy recovered from the Great Recession of 2007, 2008, and 2009. In 2015, there were 43.1 million in poverty, 3.5 million less than 2014. This was the largest one-year drop in the poverty rate since the 1960s. *
Student loan A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest r ...
debt rose from $706.1 billion (4.8% GDP) in Q1 2009 to $1,406.8 billion (7.45% GDP) in Q4 2016.


Businesses and markets

*U.S. corporate profits reached their highest level in history, both in terms of dollars ($1.771 trillion annualized in Q4 2014) and GDP percent (10.8% in Q1 2012). Corporate profits were robust after 2009 and remained near record levels from Q1 2012 to Q4 2016. Annualized corporate profits rose from $1.0 trillion in Q1 2009 to $1.7 trillion in Q4 2016, an increase of 70%. *The stock market, measured by the S&P500 index, rose from its 10-year low of 676.53 on March 9, 2009, to 2,204.72 by November 23, 2016, a 226% increase. The S&P500 reached record highs 118 times during the Obama presidency. *The stock market, measured by the Dow Jones Industrial Average, fell from its October 9, 2007 pre-crisis peak of 14,164.53 to 6,594.44 on March 5, 2009. It regained the pre-crisis peak on March 5, 2013, closing at 14,253.77. It rose to 18,636.52 on August 15, 2016, and 19,974.62 on December 20, 2016.


Energy

*Imports of petroleum products fell from 1.85% GDP in 2009 to 0.86% GDP in 2016. The U.S. was less reliant on foreign oil than it has been in nearly 30 years. *Gasoline prices fluctuated between $2.00 and $4.00, falling towards the lower part of that range after mid-2014. *From 2008 to 2016, the U.S. tripled the amount of energy harnessed from wind and increased solar power generation by a factor of 30. *In June 2014 the Obama administration waived the crude oil export ban that had been in place since the
1973 oil crisis The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had su ...
, injecting American oil production into global trading markets. Prices for benchmark
Brent crude Brent Crude may refer to any or all of the components of the Brent Complex, a physically and financially traded oil market based around the North Sea of Northwest Europe; colloquially, Brent Crude usually refers to the price of the ICE (Intercon ...
and American gasoline immediately declined precipitously. Congress and Obama fully repealed the export ban in December 2015.


Comparison with subsequent administrations

President Trump often disparaged the economic record of Barack Obama during both the Obama and Trump presidencies, often using false or misleading statistics. However, on many key variables Trump compared unfavorably with President Obama's record through year three of Trump's presidency (i.e., 2019, before the impact of the coronavirus pandemic in 2020), while other variables continued trends established during the Obama era. # Job creation was slower in Trump's first 36 months (6.6 million) than Obama's last 36 months (8.1 million).NYT-Steven Rattner-Trump Can't Beat Obama on the Economy-August 27, 2019
/ref> # The unemployment rate fell from 10.0% in October 2009 to 4.7% by December 2016, a 5.3 percentage point decline. The 4.7% rate was below the historical average of 5.6%. Under Trump, it then fell to 3.5% by November 2019, another 1.2 percentage points. This improvement pattern was similar for all racial groups after 2010. # The budget deficit increased significantly as a percent of GDP and in dollar terms under President Trump, rising from 3.2% GDP and $585 billion in fiscal year 2016 at the end of the Obama Administration, to $984 billion and 4.7% GDP by fiscal year 2019. # The number of persons without health insurance (i.e., uninsured) rose from 28.2 million in 2016 to 32.8 million in 2019, an increase of 4.6 million or 16%. President Trump's first year (2017) was the first year with an increase in uninsured since 2010. # The stock market (measured by the S&P500) increased cumulatively by 77% in Obama's first term and 59% in Obama's second term, versus 68% in Trump's term. According to ''Marketwatch'', S&P 500 annual average growth was 13.84% under Obama and 13.73% under Trump. The Dow Jones Industrial Average grew 12.10% on average under Obama versus 11.77% under Trump.Marketwatch-Stock-market performance under Trump trails only Obama and Clinton-January 20, 2021
/ref> President Trump cut corporate income taxes by about one-third and increased budget deficits. # Real (inflation-adjusted) wages grew faster from 2014 to 2016 under Obama at 1.3% per year on average, versus 0.8% for 2017-2019 under President Trump. # Real GDP averaged 2.5% in Trump's first 3 years, vs 2.4% for Obama's final three years.


Economic narratives

One narrative for explaining the economic and budgetary performance during President Obama's tenure uses
sectoral balances The sectoral balances (also called sectoral financial balances) are a sectoral analysis framework for macroeconomic analysis of national economies developed by British economist Wynne Godley. Sectoral analysis is based on the insight that when th ...
. By
definition A definition is a statement of the meaning of a term (a word, phrase, or other set of symbols). Definitions can be classified into two large categories: intensional definitions (which try to give the sense of a term), and extensional definiti ...
, a country running a trade deficit (capital surplus) and where private savings exceeds business investment (private sector surplus) must run a government budget deficit, as the three must net to zero. Both
Martin Wolf Martin Harry Wolf (born 16 August 1946 in London) is a British journalist of Austrian-Dutch descent who focuses on economics. He is the associate editor and chief economics commentator at the '' Financial Times''. Early life Wolf was born ...
and
Paul Krugman Paul Robin Krugman ( ; born February 28, 1953) is an American economist, who is Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for ''The New York Times''. In 2008, Krugman was t ...
explained that as the Great Recession hit, the saving (deleveraging) of the private sector significantly increased, while business investment declined in the face of reduced consumer spending. This created an enormous private sector surplus. Since the trade deficit did not change significantly, the offset was a large increase in the government budget deficit. The record drop in tax revenue and large increases in automatic stabilizer expenditures (such as unemployment compensation, food stamps, and disability payments) were the mechanism for much of the additional deficit and debt increases, even before new economic policies were implemented. The significant reduction in demand implied by the increase in the private sector surplus (i.e., consumers and businesses saving rather than spending or investing) created a severe recession. Another way to look at President Obama's tenure is as a slow recovery from a combined financial crisis and recession. Research indicates such recoveries can be protracted, with lengthy periods of high unemployment and substandard economic growth. The U.S. economy steadily recovered as homeowners completed their deleveraging (debt reduction) and began to spend again, encouraging businesses to hire and invest. Supporting the recovery process were the stimulative monetary policies of the Federal Reserve, which maintained low interest rates and asset buying programs to encourage economic growth throughout President Obama's tenure.


Views before election


Energy policy

In his New Energy For America plan, Obama proposes to reduce overall U.S. oil consumption by at least 35%, or 10 million barrels per day, by 2030 in order to offset imports from
OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headqua ...
nations. And by 2011 the United States was said to be "awash with domestic oil and increasingly divorced and less reliant on foreign imports". Obama voted in favor of the
Energy Policy Act of 2005 The Energy Policy Act of 2005 () is a federal law signed by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy probl ...
, which provided incentives (chiefly tax breaks) to reduce national consumption of energy and to encourage a wide range of alternative energy sources. It also resulted in a net tax increase on oil companies. Obama and other senators introduced the BioFuels Security Act in 2006. "It's time for Congress to realize what farmers in America's heartland have known all along – that we have the capacity and ingenuity to decrease our dependence on foreign oil by growing our own fuel," Obama said. In a May 2006 letter to President George W. Bush, he joined four other
midwest The Midwestern United States, also referred to as the Midwest or the American Midwest, is one of four Census Bureau Region, census regions of the United States Census Bureau (also known as "Region 2"). It occupies the northern central part of ...
farming state senators in calling for the preservation of a $0.54-per-gallon
tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...
on imported
ethanol Ethanol (abbr. EtOH; also called ethyl alcohol, grain alcohol, drinking alcohol, or simply alcohol) is an organic compound. It is an alcohol with the chemical formula . Its formula can be also written as or (an ethyl group linked to a ...
. In an interview with
NBC The National Broadcasting Company (NBC) is an American English-language commercial broadcast television and radio network. The flagship property of the NBC Entertainment division of NBCUniversal, a division of Comcast, its headquarters are l ...
's Tim Russert on May 4, 2008, Obama said, "...we've got a serious food problem around the world. We've got rising food prices here in the United States." "There's no doubt that
biofuel Biofuel is a fuel that is produced over a short time span from biomass, rather than by the very slow natural processes involved in the formation of fossil fuels, such as oil. According to the United States Energy Information Administration ...
s may be contributing to it. And what I've said is, my top priority is making sure that people are able to get enough to eat. And if it turns out that we've got to make changes in our ethanol policy to help people get something to eat, then that's got to be the step we take." On the issue of
nuclear power Nuclear power is the use of nuclear reactions to produce electricity. Nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced b ...
, in 2005, Obama stated, "... as Congress considers policies to address air quality and the deleterious effects of carbon emissions on the global ecosystem, it is reasonable – and realistic – for nuclear power to remain on the table for consideration. Illinois has 11 nuclear power plants – the most of any State in the country – and nuclear power provides more than half of Illinois's electricity needs." Regarding McCain's plans for 45 new nuclear power plants, Obama said that it's not serious, it's not new, it's not the kind of energy policy that will give families the relief they need. Obama declared himself flatly opposed to building the Yucca Mountain nuclear waste repository in
Nevada Nevada ( ; ) is a U.S. state, state in the Western United States, Western region of the United States. It is bordered by Oregon to the northwest, Idaho to the northeast, California to the west, Arizona to the southeast, and Utah to the east. N ...
. Furthermore, he opposes new nuclear plants until the problems of nuclear waste storage, safety and cost can be addressed. In 2006, in response to Illinois residents' concerns about unreported radioactive leaks by Exelon Corporation, Obama introduced a Senate bill to effect mandatory disclosure of such leaks. In 2008, ''
The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'', which had endorsed
Hillary Clinton Hillary Diane Rodham Clinton ( Rodham; born October 26, 1947) is an American politician, diplomat, and former lawyer who served as the 67th United States Secretary of State for President Barack Obama from 2009 to 2013, as a United States sen ...
, charged that, in revising his bill, Obama had "removed language mandating prompt reporting and simply offered guidance to regulators". In response, the Obama campaign cited a ''
National Journal ''National Journal'' is an advisory services company based in Washington, D.C., offering services in government affairs, advocacy communications, stakeholder mapping, and policy brands research for government and business leaders. It publishes d ...
'' analysis of the revised bill, showing that "Obama's bill would require that any leak of radioactive materials exceeding the levels set by the
Nuclear Regulatory Commission The Nuclear Regulatory Commission (NRC) is an independent agency of the United States government tasked with protecting public health and safety related to nuclear energy. Established by the Energy Reorganization Act of 1974, the NRC began opera ...
and the
EPA The Environmental Protection Agency (EPA) is an independent executive agency of the United States federal government tasked with environmental protection matters. President Richard Nixon proposed the establishment of EPA on July 9, 1970; it be ...
be reported to state and local authorities, and to the NRC within 24 hours." Obama and other senators introduced a bill in 2007 to promote the development of commercially viable
plug-in hybrids A plug-in hybrid electric vehicle (PHEV) is a hybrid electric vehicle whose battery pack can be recharged by plugging a charging cable into an external electric power source, in addition to internally by its on-board internal combustion engine ...
and other electric-drive vehicles in order to shift away from
petroleum Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crud ...
fuels and "toward much cleaner – and cheaper – electricity for transportation". Similar legislation is now in effect in the Energy Independence and Security Act of 2007. Obama proposes that the U.S. Government invest in such developments using revenue generated from an auction-based
cap-and-trade Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emissio ...
or
emissions trading Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emissi ...
program to reduce
greenhouse gas emissions Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and ...
. Obama stresses innovation as a means to improve energy efficiency, calling for a 50% improvement by 2030. He has called for a rule, proposing tax credits to automakers in order to ease the transition. He opposes drilling in the
Arctic National Wildlife Refuge The Arctic National Wildlife Refuge (ANWR or Arctic Refuge) is a national wildlife refuge in northeastern Alaska, United States on traditional Gwich'in lands. It consists of in the Alaska North Slope region. It is the largest national wildli ...
. On June 22, 2008, Obama proposed tightening regulations on oil speculators in an effort to ease record high prices of oil. "My plan fully closes the Enron loophole and restores common-sense regulation," Obama said.


Health care

On January 24, 2007, Obama spoke about his position on health care at
Families USA Families USA is a nonprofit, nonpartisan consumer health advocacy and policy organization. Co-founded founded in 1981 by Ronald Pollack, the first executive director, and Philippe Villers, the organization's current president, Families USA's advo ...
, a health care advocacy group. Obama said, "The time has come for
universal health care Universal health care (also called universal health coverage, universal coverage, or universal care) is a health care system in which all residents of a particular country or region are assured access to health care. It is generally organized ar ...
in America ..I am absolutely determined that by the end of the first term of the next president, we should have universal health care in this country." Obama went on to say that he believed that it was wrong that forty-seven million Americans are uninsured, noting that taxpayers already pay over $15 billion annually to care for the uninsured. Obama cites cost as the reason so many Americans are without health insurance. Obama's health care plan includes implementing guaranteed eligibility for affordable health care for all Americans, paid for by insurance reform, reducing costs, removing
patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A ...
protection for pharmaceuticals, and required employer contributions. He would provide for mandatory health care insurance for children. In July 2008 ''
The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' reported that Senator Obama has promised to "bring down premiums by $2,500 for the typical family." His advisers have said that the $2,500 premium reduction includes, in addition to direct premium savings, the average family's share of the reduction in employer paid health insurance premiums and the reduction in the cost of government health programs such as Medicare and
Medicaid Medicaid in the United States is a federal and state program that helps with healthcare costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and per ...
. The
Associated Press The Associated Press (AP) is an American non-profit news agency headquartered in New York City. Founded in 1846, it operates as a cooperative, unincorporated association. It produces news reports that are distributed to its members, U.S. new ...
reported in September 2008 that Senator Obama was proposing a National Health Insurance Exchange that would include both private insurance plans and a Medicare-like government run option. Coverage would be guaranteed regardless of health status, and premiums would not vary based on health status either. The campaign estimates the cost of the program at $60 billion annually. The plan requires that parents cover their children, but does not require adults to buy insurance. According to an October 26, 2008, article in ''The New York Times'', Obama is considering a new payroll tax on large and medium employers who do not already provide their employees with health insurance, and this tax would be used to pay for health care for uninsured people, but Obama has not cited the specific percentage of payroll that the tax would be, or how small a number of employees the employer would have to have in order to be exempt from the tax.


Homes, mortgages, mortgage crisis, and real estate industry

Obama voted for the $700 billion
Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008, often called the "bank bailout of 2008", was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush. It became ...
. Obama introduced the Stop Fraud Act to increase penalties for mortgage fraud by
mortgage brokers A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. Traditionally, banks and other lending institutions have sold their own products. As markets for mortgages have become more competitive, ...
and real estate brokers and to provide more protections for low-income homebuyers. In regards to capital gains on house sales, Obama says he favors increasing
capital gains Capital gain is an economic concept defined as the profit earned on the sale of an asset which has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares. ...
tax above the present 15% rate to 20% for families whose income is above $250,000.


Views related to income inequality


Corporate governance

On April 20, 2007, Obama introduced a bill in the Senate (Shareholder Vote on Executive Compensation Act – S. 1181) requiring public companies to give shareholders an annual nonbinding vote on executive compensation, popularly called "
Say on pay Say on pay is a term used for a role in corporate law whereby a firm's shareholders have the right to vote on the remuneration of executives. Often described in corporate governance or management theory as an agency problem, a corporation's mana ...
." A companion bill introduced by Rep.
Barney Frank Barnett Frank (born March 31, 1940) is a former American politician. He served as a member of the U.S. House of Representatives from Massachusetts from 1981 to 2013. A Democrat, Frank served as chairman of the House Financial Services Committ ...
passed the House the same day. Several corporations voluntarily have begun to give shareholders such a vote because of concerns about excessive
CEO A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
salaries.


Labor rights

Obama supports the
Employee Free Choice Act The Employee Free Choice Act is the name for several legislative bills on US labor law (, , , , , , , , .) which have been proposed and sometimes introduced into one or both chambers of the U.S. Congress. The bill's purpose, as taken from the 200 ...
, a bill that adds penalties for labor violations and which would circumvent the
secret ballot The secret ballot, also known as the Australian ballot, is a voting method in which a voter's identity in an election or a referendum is anonymous. This forestalls attempts to influence the voter by intimidation, blackmailing, and potential vo ...
requirement to organize a union. Obama promises to sign the EFCA into law. He is also a co-sponsor of the "Re-empowerment of Skilled and Professional Employees and Construction Tradesworkers" or RESPECT act (S. 969) that aims to overturn the National Labor Relations Board's "Kentucky River" decision that redefined many employees lacking the authority to hire, fire, or discipline, as "supervisors" who are not protected by federal labor laws.


Minimum wage

Obama favored the increase in the federal
minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. B ...
from $5.15 an hour to $7.25, and he voted to end the
filibuster A filibuster is a political procedure in which one or more members of a legislative body prolong debate on proposed legislation so as to delay or entirely prevent decision. It is sometimes referred to as "talking a bill to death" or "talking out ...
against a bill to accomplish that. He favored raising it to $9.50 an hour by 2011, and then indexing it for inflation afterwards. In his
State of the Union speech The State of the Union Address (sometimes abbreviated to SOTU) is an annual message delivered by the president of the United States to a joint session of the United States Congress near the beginning of each calendar year on the current condi ...
in 2012, he hinted at proposing legislation to raise minimum wage rate to $9.00/hr sometime during his next term. In January 2014 he signed an executive order raising the minimum wage for federal "workers who are performing services or constructing buildings" to $10.10/hr and began garnering support for a bill to enact this change nationally. The change made to the federal worker minimum wage applies only to new contracts or contracts having their terms changed and takes effect beginning in 2015. In April 2014, the United States Senate debated the Minimum Wage Fairness Act (S. 1737; 113th Congress). The bill would amend the Fair Labor Standards Act of 1938 (FLSA) to increase the federal minimum wage for employees to $10.10 per hour over the course of a two-year period. The bill was strongly supported by President
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
and many of the Democratic senators, but strongly opposed by Republicans in the Senate and House. Obama strongly supported increasing the minimum wage, giving speeches about it urging Congress to take action. Obama argued that "if you pay people well, there's more money in everybody's pockets, and everybody does better."


Equal pay

Obama favors the concept of equal pay (the abolition of
wage A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', '' prevailing wage'', and ''yearly bonuses,'' and remune ...
differences between genders). He has supported legislation designed to improve the effectiveness of the
Equal Pay Act of 1963 The Equal Pay Act of 1963 is a United States labor law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex (see gender pay gap). It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Fro ...
. In 2007, the House of Representatives passed the
Lilly Ledbetter Fair Pay Act The Lilly Ledbetter Fair Pay Act of 2009 (, ) is a landmark federal statute in the United States that was the first bill signed into law by U.S. President Barack Obama on January 29, 2009. The act amends Title VII of the Civil Rights Act of 1964 an ...
, which, according to the
National Federation of Independent Business The National Federation of Independent Business (NFIB) is an association of small businesses in the United States. It is headquartered in Nashville, Tennessee, with offices in Washington, D.C., and all 50 state capitals. The goal of NFIB is to a ...
, would have allowed "employees to file charges of pay discrimination within 180 days of the last received paycheck affected by the alleged discriminatory decision." The bill would have overturned the
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
decision in ''Ledbetter v. Goodyear''. There the Court dismissed a woman's discrimination claim because she had filed it more than 180 days after the ''first'' affected paycheck. The bill died in a 2008 Senate vote in which Obama and other Democrats could not break a Republican
filibuster A filibuster is a political procedure in which one or more members of a legislative body prolong debate on proposed legislation so as to delay or entirely prevent decision. It is sometimes referred to as "talking a bill to death" or "talking out ...
. In the 111th congress it was passed again, and Obama signed it on January 29, 2009. The Trump administration has ended the Lilly Ledbetter fair pay act


Education

During an October 2004 debate, Obama stated that he opposed the mainstream view on education. In a July 2007 address to the
National Education Association The National Education Association (NEA) is the largest labor union in the United States. It represents public school teachers and other support personnel, faculty and staffers at colleges and universities, retired educators, and college stud ...
, Obama supported merit pay for teachers, to be based on standards to be developed "with teachers." Obama also called for higher pay for teachers. Obama's plan is estimated to cost $18 billion annually and was originally planned to be partially funded by delaying
NASA The National Aeronautics and Space Administration (NASA ) is an independent agency of the US federal government responsible for the civil space program, aeronautics research, and space research. NASA was established in 1958, succeedin ...
's
Constellation program The Constellation program (abbreviated CxP) was a crewed spaceflight program developed by NASA, the space agency of the United States, from 2005 to 2009. The major goals of the program were "completion of the International Space Station" and a ...
for five years but he has since reconsidered and stated that he will look for "an entirely different offset." "We owe it to our children to invest in early-childhood education; and recruit an army of new teachers and give them better pay and more support; and finally decide that, in this global economy, the chance to get a college education should not be a privilege for the few, but a birthright of every American." He also is against the teaching of
intelligent design Intelligent design (ID) is a pseudoscientific argument for the existence of God, presented by its proponents as "an evidence-based scientific theory about life's origins". Numbers 2006, p. 373; " Dcaptured headlines for its bold attempt to ...
as science, but supports teaching
theology Theology is the systematic study of the nature of the divine and, more broadly, of religious belief. It is taught as an academic discipline, typically in universities and seminaries. It occupies itself with the unique content of analyzing th ...
. Obama has proposed the
American Opportunity Tax Credit The American Opportunity Tax Credit is a partially refundable tax credit first detailed in Section 1004 of the American Recovery and Reinvestment Act of 2009. The act specifies: # Provisions were originally specific to tax years 2009 and 2010, la ...
, which would provide a refundable
tax credit A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "dis ...
for education in exchange for
community service Community service is unpaid work performed by a person or group of people for the benefit and betterment of their community without any form of compensation. Community service can be distinct from volunteering, since it is not always performe ...
. Obama wants 5,000 failing schools to close, and then reopen with new principals and teachers.


Network neutrality and government use of information technology

In a June 2006 podcast, Obama expressed support for telecommunications legislation to protect network neutrality on the Internet, saying: "It is because the
Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, p ...
is a neutral platform that I can put out this
podcast A podcast is a program made available in digital format for download over the Internet. For example, an episodic series of digital audio or video files that a user can download to a personal device to listen to at a time of their choosin ...
and transmit it over the Internet without having to go through any corporate media middleman. I can say what I want without
censorship Censorship is the suppression of speech, public communication, or other information. This may be done on the basis that such material is considered objectionable, harmful, sensitive, or "inconvenient". Censorship can be conducted by governments ...
or without having to pay a special charge. But the big telephone and cable companies want to change the Internet as we know it." Obama reaffirmed his commitment to net neutrality at a meeting with
Google Google LLC () is an American Multinational corporation, multinational technology company focusing on Search Engine, search engine technology, online advertising, cloud computing, software, computer software, quantum computing, e-commerce, ar ...
employees in November 2007, at which he said, "once providers start to privilege some applications or web sites over others, then the smaller voices get squeezed out, and we all lose." At the same event, Obama pledged to appoint a Chief Technology Officer to oversee the U.S. government's management of IT resources and promote wider access to government information and decision making. In a February 2014 official blog post titled "We The People Response: Reaffirming the White House's Commitment to Net Neutrality", the Obama administration, via Chief Technology Officer Todd Park, once again reaffirmed its commitment to net neutrality by stating, "Preserving an open Internet is vital not to just to the free flow of information, but also to promoting innovation and economic productivity.TheTrump administration has repealed net neutrality https://money.cnn.com/2017/12/14/technology/fcc-net-neutrality-vote/index.html


Taxation

Under Obama's plan, middle-class families would see their income taxes cut, with no family making less than $250,000 seeing an increase. In June 2008, Obama voted in favor of a budget that would raise the taxes on unmarried individuals with a taxable income of over $32,000 by pushing their tax bracket from 25% to 28%. Obama has proposed a tax plan which includes tax credits to lower the amount of taxes paid. It is argued that the typical middle-class family would receive over $1,000 in tax relief, with tax payments that are 20% lower than they faced under President
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
. According to the Tax Policy Center, the Obama plan provides three times as much tax relief for middle-class families as the McCain plan. Obama's plan includes a temporary " Making Work Pay" program, which gives a tax credit at 6.2% of earned income ''up to'' $400 for single workers (making less than $75,000/yr), and an $800 for married couples (making less than $150,000/yr), expiring at the end of 2010; this is claimed on Schedule M of
Form 1040 Form 1040 (officially, the "U.S. Individual Income Tax Return") is an IRS tax form used for personal federal income tax returns filed by United States residents. The form calculates the total taxable income of the taxpayer and determines how much ...
. Families making more than $250,000 would pay either the same or lower income tax rates than they paid in the 1990s, leaving no family to pay higher income tax rates than they would have paid in the 1990s. For the wealthiest 2% of families, Obama plans to reverse a portion of the tax cuts they have received over the past eight years. Dividend rates would be 39 percent lower than what President George W. Bush proposed in his 2001 tax cut. Obama's plan is to cut income taxes overall, which he states would reduce revenues to below the levels that prevailed under Ronald Reagan (less than 18.2 percent of GDP). Obama argues that his plan is a net tax cut, and that his tax relief for middle-class families is larger than the revenue raised by his tax changes for families over $250,000. Obama plans to pay for the tax changes while bringing down the budget deficit by cutting unnecessary spending. Speaking in November 2006 to members of Wake Up Wal-Mart, a union-backed
campaign group The Socialist Campaign Group, officially the Socialist Campaign Group of Labour MPs and also known as the Campaign Group, is a left-wing, democratic socialist grouping of the Labour Party's Members of Parliament in the House of Commons of the ...
, Obama said: "You need to pay your workers enough that they can actually not only shop at
Wal-Mart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...
, but ultimately send their kids to college and save for retirement." His tax plan is projected to bring in an additional $700 billion in taxes over the next 10 years. In '' The Audacity of Hope'' and the ''Blueprint for Change'' Obama advocates responding to the "precarious budget situation" by eliminating "tax credits that have outlived their usefulness", closing corporate tax loopholes, and restoring the
PAYGO PAYGO (Pay As You GO) is the practice in the United States of financing expenditures with funds that are currently available rather than borrowed. Budgeting The PAYGO compels new spending or tax changes not to add to the federal debt. Not to be c ...
policy that prohibits increases in federal spending without a way to compensate for the lost revenue. During an October 13, 2008 speech at
Toledo, Ohio Toledo ( ) is a city in and the county seat of Lucas County, Ohio, United States. A major Midwestern United States port city, Toledo is the fourth-most populous city in the state of Ohio, after Columbus, Ohio, Columbus, Cleveland, and Cincinnat ...
, Obama said that for the next two years, he favors a $3,000 tax credit to businesses for each new full-time employee whom they hire above the number in their current work force.Obama Expands Economic Plans
''The New York Times'', October 13, 2008
For people with incomes above $250,000, Obama wants to reduce their charitable tax deduction from 35 cents for each dollar donated to 28 cents for each dollar donated, to match the level of deductions for people making less than $250,000. In a press conference on March 24, 2009, Obama stated that he wanted to return to the rate that existed in the Reagan administration. "There's very little evidence that this has a significant impact on charitable giving," said Obama. "I'll tell you what has a significant impact on charitable giving, is a financial crisis and an economy that's contracting. And so the most important thing that I can do for charitable giving is to fix the economy, to get banks lending again, to get businesses opening their doors again, to get people back to work again." Thomas L. Hungerford of the
Congressional Research Service The Congressional Research Service (CRS) is a public policy research institute of the United States Congress. Operating within the Library of Congress, it works primarily and directly for members of Congress and their committees and staff on a ...
has written that "allowing the tax cuts targeted to high income taxpayers to expire as scheduled could help reduce budget deficits in the short-term without stifling the economic recovery." Obama said he wanted to "look at raising the capital gains tax for purposes of fairness."


Social Security

In response to a possible shortfall in
Social Security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
funding, Obama has endorsed imposition of a new
FICA The Federal Insurance Contributions Act (FICA ) is a United States federal payroll (or employment) contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for re ...
tax on incomes above $250,000. Social Security has an income "cap" beyond which the payroll tax is not collected; in 2015 and 2016, the cap was $118,500. Obama opposed Bush's proposal for privatization of Social Security.


Lobbying and campaign finance reform

Obama has spoken out numerous times against the influence of
lobbying in the United States Lobbying in the United States describes paid activity in which special interest groups hire well-connected professional advocates, often lawyers, to argue for specific legislation in decision-making bodies such as the United States Congress. I ...
. He also co-sponsored legislation that limits lobbyists' influence by mandating that lawmakers pay full charter fare when flying on lobbyists' corporate jets. On January 24, 2007, in reference to his stated plan to take public financing should he procure the nomination, he said, "I think that for a time, the presidential public financing system works." On November 27, he said, "I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election," and on February 28, 2008, he wrote that he planned to "aggressively pursue" a publicly financed campaign, later promising to sit down with John McCain to ensure "a public system" of campaign financing is preserved. On June 19, 2008, he opted out of public campaign financing and declared, "I support a robust system of public financing of elections (...) but the public financing of presidential elections as it exists today is broken." Furthermore, he maintained that he would not take contributions from federal lobbyists and special interests during his 2008 presidential campaign. According to his website, Obama would create an online database of lobbying reports, campaign finance filings and ethics records, and would create an independent watchdog agency to oversee congressional ethical violations.


Immigration

Obama supports a guest worker program, and voted in favor of the Bush administration backed Comprehensive Immigration Reform Act of 2007. Obama has said that he "will not support any bill that does not provide nearned path to citizenship for the undocumented population." Obama has said that he does not believe that the 12 million
illegal immigrant Illegal immigration is the migration of people into a country in violation of the immigration laws of that country or the continued residence without the legal right to live in that country. Illegal immigration tends to be financially upwa ...
s should be deported. He said "It's not going to happen. We're not going to go round them up ... We should give them a pathway to citizenship." In September 2006, Obama voted for the Secure Fence Act, authorizing the construction of of fencing along the
United States–Mexico border United may refer to: Places * United, Pennsylvania, an unincorporated community * United, West Virginia, an unincorporated community Arts and entertainment Films * ''United'' (2003 film), a Norwegian film * ''United'' (2011 film), a BBC Two fi ...
. Obama has supported granting
driver's license A driver's license is a legal authorization, or the official document confirming such an authorization, for a specific individual to operate one or more types of motorized vehicles—such as motorcycles, cars, trucks, or buses—on a publi ...
s to illegal immigrants. In June 2007, Obama voted against declaring English as the
official language An official language is a language given supreme status in a particular country, state, or other jurisdiction. Typically the term "official language" does not refer to the language used by a people or country, but by its government (e.g. judiciary, ...
of the federal government. In November 2007, Obama stated that, "We can … go a long way toward meeting industry's need for skilled workers with Americans. Until we have achieved that, I will support a temporary increase in the H-1B visa program as a stopgap measure until we can reform our immigration system comprehensively." In July 2007, Obama said, "Find out how many senators appeared before an immigration rally last year. Who was talking the talk, and who walked the walk – because I walked…I didn't run away from the issue, and I didn't just talk about it in front of Latino audiences." "I believe we must secure our borders, fix our broken immigration bureaucracy, and require the 12 million undocumented to get on a responsible path to
citizenship Citizenship is a "relationship between an individual and a state to which the individual owes allegiance and in turn is entitled to its protection". Each state determines the conditions under which it will recognize persons as its citizens, and ...
. I will also increase the number of people we allow in the country
legally Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vari ...
to a level that unites families and meets the demand for jobs employers cannot fill" "I support comprehensive immigration reform that includes improving our visa programmes, including the
H-1B The H-1B is a visa in the United States under the Immigration and Nationality Act, section 101(a)(15)(H) that allows U.S. employers to temporarily employ foreign workers in specialty occupations. A specialty occupation requires the application of ...
programme, to attract some of the world's most talented people to America", Obama said in an interview with IANS in October 2008. On 25 November 2013, Ju Hong, a 24-year-old South Korean immigrant without legal documentation, shouted at Obama to use his executive power to stop deportation of illegal immigrants. Obama said "If, in fact, I could solve all these problems without passing laws in Congress, then I would do so." "But we're also a nation of laws, that's part of our tradition," he continued. "And so the easy way out is to try to yell and pretend like I can do something by violating our laws. And what I'm proposing is the harder path, which is to use our democratic processes to achieve the same goal."


Affirmative action

In reference to state ballot initiatives on affirmative action, Obama's spokesperson Candice Toliver said that "Senator Obama believes in a country in which opportunity is available to all Americans, regardless of race, gender or economic status. That's why he opposes these ballot initiatives, which would roll back opportunity for millions of Americans and cripple efforts to break down historic barriers to the progress of qualified women and minorities." Obama writes in his most recent book, '' The Audacity of Hope'': " Affirmative action programs, when properly structured, can open up opportunities otherwise closed to qualified minorities without diminishing opportunities for white students." In July, Obama stated, "I am a strong supporter of affirmative action when properly structured so that it is not just a quota, but it is acknowledging and taking into account some of the hardships and difficulties that communities of color may have experienced, continue to experience, and it also speaks to the value of diversity in all walks of American life." He has indicated support for affirmative action based on class, not just race, (q.v. redistributive change) in comments where he said that his daughters should be treated by prospective colleges and employers as people that grew up with a privileged background. The Trump administration has reversed the Obama era affirmative action policies.


Trade

Barack Obama made critical statements about the
North American Free Trade Agreement The North American Free Trade Agreement (NAFTA ; es, Tratado de Libre Comercio de América del Norte, TLCAN; french: Accord de libre-échange nord-américain, ALÉNA) was an agreement signed by Canada, Mexico, and the United States that crea ...
(NAFTA) during the Democratic primaries, calling the trade agreement "devastating" and "a big mistake". In February 2008, a Canadian diplomatic memo surfaced, which alleged that Obama's economic advisor Austan Goolsbee had met with Canadian consular officials in Chicago and told them to disregard Obama's campaign rhetoric regarding NAFTA, a charge the Obama campaign later denied (see Barack Obama presidential primary campaign, 2008#NAFTA controversy). Obama also noted that free trade comes with its own costs: he believes the displacement of Mexican farmers by more efficient American counterparts has led to increased immigration to the United States from that country.


Faith based programs

In July 2008, after winning the primary, Obama said that he wants to expand federal funding of faith-based programs and establish a "Council for Faith-Based and Neighborhood Partnerships". He specified that, under his plan, federal money given to places of worship could only be used on secular programs. In particular, he mentioned, on July 1 in
Zanesville, Ohio Zanesville is a city in and the county seat of Muskingum County, Ohio, United States. It is located east of Columbus and had a population of 24,765 as of the 2020 census, down from 25,487 as of the 2010 census. Historically the state capita ...
, that "support for social services to the poor and the needy have consistently been underfunded". He went on to praise President Bush's efforts, but contended that the current administration's plan never managed to "rally the armies of compassion."


Government waste

On September 22, 2008, Obama said, "I am not a Democrat who believes that we can or should defend every government program just because it's there... We will fire government managers who aren't getting results, we will cut funding for programs that are wasting your money and we will use technology and lessons from the private sector to improve efficiency across every level of government... The only way we can do all this without leaving our children with an even larger debt is if Washington starts taking responsibility for every dime that it spends." Early in the Obama administration, some became aware of a program that provided free cellphones and service to the poor, concluding it was a new Obama program and branded the phenomenon as "Obamaphones." This became an ongoing meme during the Obama presidency, supposedly representing how Obama was creating a welfare state. However, the cellphone program had begun in 2008, as an extension of the Universal Service Fund dating back to at least 1996, and is not funded with taxpayer money.


See also

* Comparison of the 2008 United States presidential candidates *
List of Barack Obama 2008 presidential campaign endorsements This is a list of notable persons and groups who formally endorsed or voiced support for Senator Barack Obama's presidential campaign during the Democratic Party primaries and the general election. U.S. presidents and vice presidents U.S. ...
* Political positions of Joe Biden * U.S. economic performance under Democratic and Republican presidents


References


External links

;Official sites
BarackObama.com – Answer Center

BarackObama.com – Issues

Obama Senate.gov – Issues
;Topic pages and databases ;General
Chicago Tribune
– Candidate coverage

– Issue positions
Project Vote Smart
– Candidate information, including issue positions ;Disability issues

;Environment

Comprehensive review from the
League of Conservation Voters The League of Conservation Voters (LCV) is an American environmental advocacy group. LCV says that it "advocates for sound environmental laws and policies, holds elected officials accountable for their votes and actions, and elects pro-environmen ...
. ;Foreign affairs
"Renewing American Leadership"
– detailed article by
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
in ''
Foreign Affairs ''Foreign Affairs'' is an American magazine of international relations and U.S. foreign policy published by the Council on Foreign Relations, a nonprofit, nonpartisan, membership organization and think tank specializing in U.S. foreign policy a ...
''
Barack Obama's positions on top foreign policy issues
– extensive material documented by the
Council on Foreign Relations The Council on Foreign Relations (CFR) is an American think tank specializing in U.S. foreign policy and international relations. Founded in 1921, it is a nonprofit organization that is independent and nonpartisan. CFR is based in New York Ci ...
;Health care
2008 Presidential Candidate Health Plan Report Card
issued by the National Physicians Alliance
2008 Presidential Candidates' Health Reform Proposals
from The Commonwealth Fund ;Israel and the Middle East conflict
Obama on Zionism and Hamas
– extensive interview with
Jeffrey Goldberg Jeffrey Mark Goldberg (born September 22, 1965) is an American journalist and editor-in-chief of ''The Atlantic'' magazine. During his nine years at ''The Atlantic'' prior to becoming editor, Goldberg became known for his coverage of foreign affa ...

Speech by Senator Barack Obama
{{DEFAULTSORT:Economic policy of Barack Obama Policies of Barack Obama Obama, Barack