Calling it the “defining challenge of our time,” President Obama on Wednesday said that he would dedicate his three remaining years in office to reversing the “relentless decades-long trend” toward increasing economic inequality and declining opportunities for upward mobility in the United States.
Obama argued, “It’s not enough anymore to just say we should . . . let the unfettered market take care of it,” the president delivered an ardent defense of activist government. He highlighted many of the differences between his administration and congressional Republicans who have vigorously opposed his policies on health care reform, stimulus spending, individual and corporate tax reform and increasing the minimum wage.
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On the same day that an organization of CEOs reported slightly increased optimism about the direction of the economy, the president vowed to continue to push a “growth agenda,” noting, “You can’t tackle inequality if the pie is shrinking.”
Yet the preponderance of the president’s speech focused on the challenges facing low and moderate income Americans who, he said, have the “nagging sense that no matter how hard they work, the deck is stacked against them.”
Among other things, Obama pushed for increased education assistance, including universal preschool; empowering workers by raising the minimum wage and strengthening collective bargaining; closing tax loopholes; and providing targeted assistance to individuals and communities hit hardest during the great recession.
He acknowledged that most of these priorities are likely to run into Republican obstruction on Capitol Hill, and urged Congressional Republicans to present competing proposals if they have them, rather than simply refusing to engage with the administration on issues impacting economic inequality.
“You owe it to the American people to tell us what you are for, not just what you are against,” he said.
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Obama's remarks on the economy, delivered at the liberal leaning Center for American Progress, come as he seeks to move beyond the controversy over the Healthcare.gov website that has dominated the political debate for months. He once again apologized for his administration's "poor execution" in rolling out the flawed website designed to enroll millions of Americans in health insurance coverage; but he also blamed Republicans for a "reckless" shutdown of the government.
"Nobody has acquitted themselves very well these past few months,” he said.
Shortly before Obama spoke, the Business Roundtable released the results of its latest Economic Outlook survey, which showed that the nation’s corporate executives are slightly more optimistic about economic growth in the next six months. Expectations for sales, capital expenditures and hiring all increased over the expectations voiced in the third quarter of 2013.
According to the fourth quarter 2013 study, 73 percent of CEOs surveyed predicted that their sales would increase in the next six months; 89 percent predicted that capital expenditures would either stay the same or increase; and 34 percent predicted an increase in hiring, while only 22 percent anticipated downsizing.
However, those surveyed continue to expect the economy to grow at a modest 2.2 percent next year. And nearly 40 percent cited government regulations as the “greatest area of cost pressure” facing their companies.
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“In aggregate, our expectations are consistent with an economy that will continue along the path of steady, modest recovery into the first half of 2014,” said James McNerney, Chairman of the Business Roundtable and chairman and president of The Boeing Company. “The Outlook Survey reflects slightly increased optimism despite an under-performing economy that continues to grow more slowly than we all would like.”
McNerney and John Engler, the former Michigan governor and president of the Business Roundtable, told reporters that CEOs remain concerned about the “ongoing uncertainty” stemming from the stalemate in Congress over spending priorities, immigration reform and corporate tax reform.
However, they praised Senate Budget Committee Chairwoman Patty Murray (D-WA) and House Budget Committee Chairman Paul Ryan (R-WI) for returning to “regular order” by trying to negotiate a bipartisan budget deal before a Dec. 13 deadline to avert another government shutdown in January.
McNerney said, “We do have an economy that’s on the cusp of growing a little bit more than just 2 to 2 and a half percent,” if the administration and congressional leaders move past government brinksmanship and begin to restore confidence in the government.
Whether the president’s new, more populist approach to pursuing economic growth will resonate with the business community is doubtful.
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Obama said that when the wealthiest ten percent of Americans now take home fifty percent of all earnings and the average CEO now earns 273 times as much as the average worker, it “challenges the very essence of who we are as a people.”
Americans, he said, “never begrudged success” and, in fact, often tolerated greater inequality than many other wealthy countries because it was believed that it went hand-in-hand with greater opportunity.
However in the past three decades, he said, “alongside increased inequality we’ve seen decreased upward mobility” - adding that it is “harder for a child born here in America to improve her station in life” than it is for children living in other advanced economies.
“We are a better country than this,” he said. - Follow the authors on Twitter @rrgarver and @ericpianin
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