Barack Obama on The Economy
President Obama is a strong supporter of what is known as the Keynesian model of economics. It is the viewpoint that government can and should stimulate the economy to provide jobs. This viewpoint was seen in legislation that he supported, such as the ARRA and the American Jobs Act, as well as actions taken to intervene in the GM and use TARP funds to address housing and jobs.
2008 Presidential Election
President Obama's blueprint for the economy consisted of 8 bullet points that he would pursue as President. The first of these was an emergency economic plan that consisted of a $1,000 energy rebate and a $50 billion stimulus for local communities. The second facet of the plan was taxes. Senator Obama pledged not to raise taxes on anyone making less than $250,000 a year and to in fact lower them. The third item he addressed in the blueprint was job creation. To accomplish this, he pledged $15 billion a year to create 5 million jobs in the green energy sector. To address the fourth item - foreclosures - Senator Obama pledged to crack down on mortgage companies that broke the rules and create a fund to assist in avoiding foreclosure and create a tax to covers 10% of a family's mortgage interest per year. The fifth sector the Senator Obama addressed was the need to reform bankruptcy laws. He pledged to reform these laws to allow for those who had medical bills to get out from under them in bankruptcy. As the sixth pillar in this plan, Senator Obama pledged to support the Employee Free Choice Act to help unions. In the seventh area, Senator Obama pledged not to sign any trade agreement that did not enforce the labor and environmental laws within them. He also pledged to pass legislation to remove tax incentives to send jobs overseas. To improve the work / life balance, Senator Obama pledged to double money for after school programs and expand the Family Medical Leave Act to force employers to provide 7 paid sick days a year and ensure that caregivers are not discriminated against..
Within days of winning the Presidency, the Congress began to pass the American Recovery and Reinvestment Act into law and President Obama signed it just a couple of months after coming into office. President Obama was a strong supporter of the stimulus and believed that it would ensure that unemployment would not go above 8%.
TARP Funds and Job Creation
In December of 2009, President Obama announced that the White House was allocating funds remaining within the TARP legislation to help create jobs. These funds were used to focus on three items including helping small businesses, infrastructure investment, and investments in clean energy. To help those small businesses, the plan included tax cuts to support business investment, zero capital gains for small business, extending the Stimulus Act bonus depreciation tax incentive, and new tax incentives to encourage hiring.
The American Jobs Act
As the funds from the Stimulus began to wind down, President Obama began pushing for the American Jobs Act. This legislation totaled roughly half the amount of the ARRA and would have allocated funds to many of the same items done by the ARRA. This included funds to the states for teachers and other state workers, and tax cuts.
Wall Street Reform
The Wall Street Reform legislation was strongly supported by President Obama. As stated by the White House, the main basis of the legislation was that the financial crisis was the result of a fundamental failure from Wall Street to Washington and that no tax payer should be forced to bail them out. The White House asserted that the legilsation would end the bailouts. This was accomplished in part through the "Volcker Rule." This rule asserted that banks are no longer allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers.
2012 Economic Plan
At the 2012 State of the Union address in January of 2012, President Obama outlined a plan called the "Blueprint for an America Built to Last." The high level outline of that plan is shown below and consists of four parts including manufacturing, work and school programs, energy, and values. These values encompass a number of economic ideas including installing the Buffett Rule, continuing the Social Security tax cuts, and passing a balanced budget.
It should be noted that roughly 50 days before the 2012 election, references to this plan were removed and no plan was in place on the site - barackobama.com.
I. Manufacturing: Create New Jobs Here In America, Discourage Outsourcing, And Encourage
- Take away the deduction for outsourcing, make companies pay a minimum tax for profits andjobs overseas, and reward companies for bringing jobs back to America.
- Lower tax rates for companies that manufacture and create jobs in the United States.
- Get tough on trade enforcement.
- Create more jobs and make us more competitive by rebuilding America using half of the savings from ending foreign wars.
II. Skills: Give Hard-Working, Responsible Americans A Fair Shot
- Forge new partnerships between community colleges and businesses to train and place 2 million skilled workers.
- Reform job training and Unemployment Insurance and create one website that dislocated workers can use to help them get back to work.
- Attract, prepare, support, and reward great teachers to help students learn.
- Call on every state to require that all students stay in high school until they graduate or turn 18.
- Double work-study jobs and take steps to hold down college costs for middle-class families.
- Build a 21st century immigration system and give responsible young people a chance to earn their citizenship.
- Put veterans to work protecting our communities and preserving our natural resources.
- Secure equal pay for equal work.
- Help start-ups and small businesses succeed and create jobs by reforming regulations and expanding tax relief.
- Help spur innovation by investing in research and development.
III. Energy: Make The Most Of America’s Energy Resources
- Promote safe, responsible development of the near 100-year supply of natural gas, supporting more than 600,000 jobs while ensuring public health and safety.
- Incentivize manufacturers to make energy upgrades, saving $100 billion over the next decade.
- Create clean energy jobs in the United States.
IV. Values: Ensure Every American Plays By The Same Set Of Rules And Pays Their Fair Share
- Make the tax code fairer and simpler for the middle class and make sure millionaires and billionaires follow the Buffett Rule by paying at least 30% in taxes.
- End subsidies for millionaires.
- Prevent tax increases for working families by extending the payroll tax cut.
- Call on Congress to give every responsible homeowner the opportunity to refinance.
- Make sure Wall Street plays by the same rules.
- Reduce the influence of money and lobbyists and do away with procedures that stop Congress from working on behalf of the American people.
- Pass a balanced, fair deficit reduction plan.
Blueprint for the Economy
As part of his 2008 campaign, Senator Obama put out a series of videos described as blueprints for issues. His bluepring for the economy in 2008 laid out a series of items that he would pursue for the economy ranging from passing the Employee Free Choice Act, to trade agreements, and stimulus.
Use of TARP Funds for Job Creation
On December 8, 2009 the White House announced that it would be taking the remaining TARP funds and using it for programs to stimulate job growth. The President made the announcement at the Brookings Institution in Washington, DC.
Wall Street Reform
After the passage of Wall Street reform legislation, President Obama used his weekly address to talk about the legislation and the watchdog organization it created. He criticized Republicans that opposed the legislation as it was passing Congress and was disappointed that Republicans were calling for repeal of the legislation during the election. He stated that powerful financial interests and Republicans seeking an election year victory used a large amount of capital and influence to defeat the legislation, but were unsuccessful.
2012 State of the Union
The Obama campaign asserts that the plan for the economy laid out by President Obama in the 2012 state of the union address is the one being used by the campaign. The video of that speech is shown below in what the White House refers to as an "enhanced version" that has added graphics.
Official Website Statements
Troubled Asset Relief Program (TARP)
The TARP program was designed to prevent the failure of large banks by purchasing their "troubled assets" and allowing them to move them off their records as liabilities. The bill received both bipartisan support and bipartisan opposition and passed 74-25 with the two parties making up about half of each vote. In January of 2009, the Senate voted on granting the second half of the TARP funds to President Obama. Barack Obama voted in favor of the TARP program.
Barack Obama voted in favor of the TARP program.
The Bush Stimulus
In early 2008, the Recovery Rebates and Economic Stimulus for the American People Act of 2008 was passed in an attempt to stimulate the economy. Also known as the Bush Stimulus, the act consisted largely of checks sent to individuals. The bill received wide bipartisan support and passed the Senate 81-16. Barack Obama cast a "No Vote"
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 completely redefined bankruptcy in the United States. The bill made it much more '); echo('for people to walk away from unsecured debt, such as credit cards, and permitted the court to award some compensation to creditors in the event that a bankruptcy was awarded. The bill got bipartisan support and passed 74-25. Barack Obama voted against the Bankruptcy Reform bill.
Barack Obama voted against the Bankruptcy Reform bill.
Sponsored and Cosponsored Legislation
A bill to amend the Consumer Credit Protection Act, to ban abusive credit practices, enhance consumer disclosures, protect underage consumers, and for other purposes.
 Website: Washington Post Article: Fed to Pump $1.2 Trillion Into Markets Author: Neil Irwin Accessed on: 03/15/2011