Economic policy of Barack Obama
The economic policy of the Barack Obama administration is a combination of tax increases on the wealthiest Americans and investment in myriad public services such as scientific research, infrastructure, health care reform, and education that is meant to boost the American economy and future prospects. Barack Obama himself is a proponent of using government regulation to stem crony capitalism, and tax revenue to stabilize and promote economic growth. Current economic advisers are Alan B. Krueger of Princeton University and Jeffrey Liebman of Harvard University. In 2006, Obama wrote: "We should be asking ourselves what mix of policies will lead to a dynamic free market and widespread economic security, entrepreneurial innovation and upward mobility [...] we should be guided by what works." Speaking before the National Press Club in April 2005, he defended the New Deal social welfare policies of Franklin D. Roosevelt, associating Republican proposals to establish private accounts for Social Security with Social Darwinism.
- 1 Corporate governance
- 2 Labor rights
- 3 Minimum wage
- 4 Equal pay
- 5 Education
- 6 Energy policy
- 7 Health care
- 8 Homes, mortgages, mortgage crisis, and real estate industry
- 9 Network neutrality and government use of information technology
- 10 Taxation
- 11 Social Security
- 12 Lobbying and campaign finance reform
- 13 Immigration
- 14 Affirmative action
- 15 Trade
- 16 Faith based programs
- 17 Government waste
- 18 U.S. automobile industry reorganization
- 19 See also
- 20 References
- 21 External links
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." A companion bill introduced by Rep. Barney Frank passed the House the same day. Several corporations voluntarily have begun to give shareholders such a vote because of concerns about excessive CEO salaries.
Obama supports the Employee Free Choice Act, a bill that adds penalties for labor violations and which would circumvent the secret ballot requirement to organize a union. Obama promises to sign the EFCA into law. He is also a cosponsor 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" 532 U.S. 706 (2001) decision that redefined many employees lacking the authority to hire, fire, or discipline, as "supervisors" who are not protected by federal labor laws.
Obama favored the increase in the federal minimum wage from $5.15 an hour to $7.25, and he voted to end the filibuster 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 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 affect 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 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."
Obama favors the concept of equal pay (the abolition of wage differences between genders). He has supported legislation designed to improve the effectiveness of the Equal Pay Act of 1963. In 2007, the House of Representatives passed the Lilly Ledbetter Fair Pay Act, which, according to the National Federation of Independent Business, 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 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. In the 111th congress it was passed again, and Obama signed it on January 29, 2009.
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, 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's Constellation program 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 as science, but supports teaching theology.
Obama wants 5,000 failing schools to close, and then reopen with new principals and teachers.
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 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, 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 farming state Senators in calling for the preservation of a $0.54-per-gallon tariff on imported ethanol.
In an interview with NBC'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 biofuels 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, 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’ 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. 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, which had endorsed Hillary Rodham Clinton, 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 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 and the EPA 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 and other electric-drive vehicles in order to shift away from petroleum 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 or emissions trading program to reduce greenhouse gas emissions.
Obama stresses innovation as a means to improve energy efficiency, calling for a 50% improvement by 2030. He has called for a 50 miles per US gallon (4.7 L/100 km; 60 mpg-imp) rule, proposing tax credits to automakers in order to ease the transition.
He opposes drilling in the Arctic National Wildlife Refuge.
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.
On January 24, 2007 Obama spoke about his position on health care at Families USA, a health care advocacy group. Obama said, "The time has come for universal health care 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 protection for pharmaceuticals, and required employer contributions. He would provide for mandatory health care insurance for children.
In July 2008 The New York Times 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.
The Associated Press 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
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 is a neutral platform that I can put out this podcast and transmit it over the Internet without having to go through any corporate media middleman. I can say what I want without censorship 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 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."
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. 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. 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, Obama said: "You need to pay your workers enough that they can actually not only shop at Wal-Mart, 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 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, 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.
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 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."
In response to a possible shortfall in Social Security funding, Obama has endorsed imposition of a new FICA tax on incomes above $250,000. Currently, income above $106,800 is exempt from such taxation. 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. 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.
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 [an] earned path to citizenship for the undocumented population."
Obama has said that he does not believe that the 12 million illegal immigrants 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 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. I will also increase the number of people we allow in the country legally 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 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."
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.
Barack Obama made critical statements about the North American Free Trade Agreement (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, 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."
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."
U.S. automobile industry reorganization
To enable a chapter 11 reorganization the government backed General Motors with $51 billion and Chrysler with $12.3 billion. Due to the reprivatization the U. S. Treasury recovered $39 billion from selling its GM stake and $11.13 billion from Chrysler. 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.
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- Tapper, Jake (2007-12-29). "Obama Ad Omits Lobbyist Reference". ABC News. Retrieved 2008-01-04.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Weixel, Nathaniel (2007-11-15). "Feingold, Obama go after corporate jet travel". TheHill.com. Retrieved 2008-05-24.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Politico’s guide to Obama’s opt-out - Ariel Alexovich and Jacqueline Klingebiel - Politico.com
- "Obama Opts Out of Public Campaign Finance System". Associated Press. 2008-06-19. Retrieved 2008-06-30.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- "McCain attacks Obama for opting out of public financing". CNN. 2008-06-20. Retrieved 2008-06-30.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Floor Statement of Senator Barack Obama on Immigration Reform Retrieved on January 26, 2007
- Sen. Obama at Joliet town hall | U.S. Senator Barack Obama
- Washington Post[dead link]
- Carolyn Lochead (January 28, 2008). "Obama takes big risk on driver's license issue". San Francisco Chronicle. Retrieved 2008-03-11.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Water, No Ice " Blog Archive " Obama vs. McCain – Immigration
- Oh-eight (D): Yucca Mountain politics - First Read - msnbc.com
- Obama's Divisive Immigration Policies
- India will be my top priority: Barack Obama, Express Buzz,October 23, 2008
- Obama Is No 'Post-Racial' Candidate, The Wall Street Journal
- Obama’s Affirmative Action Test, Newsweek.com
- Barack Obama has gotten past affirmative action. Have we?, By Dahlia Lithwick - Slate Magazine
- "Candidates oppose quotas, but offer no fix for affirmative action". CNN. July 28, 2008. Archived from the original on 2008-07-30. Retrieved 2008-07-29.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Obama shifts affirmative action rhetoric, By David Kuhn - The Politico "Obama has called for government to 'craft' a policy 'in such a way where some of our children who are advantaged aren't getting more favorable treatment than a poor white kid who has struggled more.'
- CNN Money
- Goolsbee, Austan. "Leaked Memo" (PDF). ABC News. Retrieved 2008-02-08.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Obama plan would expand faith-based program, International Herald Tribune, July 1, 2008
- "Obama focuses on faith; McCain slams earmarks in crime speech". CNN. 2008-07-01. Retrieved 2008-07-01.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Obama vows deep cuts in spending, Associated Press, September 22, 2008
- Bloomberg, GM Bailout Ends as U.S. Sells Last of Government Motors, Dec 10, 2013
- USA Today, Government sells last of its GM shares, Dec 10, 2013
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