The economy: Already a lost cause for Obama?

Aug 11, 2011

Join Ann O'Leary as she discusses how the economic instability of American families might affect President Obama's reelection efforts, his image and reputation with progressives.

Related: Nervous Democrats say President Obama must be bolder on economy

Thank you for joining me today to talk about the economic crisis faced by American families and how this crisis will impact President Obama’s re-election campaign.  With unemployment hovering at 9.1 percent, health premiums and out of pocket expenses continuing to rise, and 1 in 8 American families with delinquent home loans or in foreclosure, Americans want leadership.  Right now, they are not sure either the President or Congress are providing it.  Let’s discuss.

The GOP has and will continue to obstruct everything he'll try. Even though he may have caved in the past, what can he do now? I think the "super committee" will deadlock, as the GOP intended all along so they can get their spending cuts. Obama should focus on red states--cut farm subsidies, rural subsidies, and defense. Furlough those who watch for illegal crop imports. Shut down those who send out farm welfare entitlement checks. Cancel almost all new weapons system procurement contracts, especially those in red states. Let the right howl. Then Obama can blackmail the right. Agree to tax hikes on the rich, or Elmer Fudd loses his farm welfare entitlements. The polls show he can pin the blame for default on the right, so why not? Personally, as a loyal Dem who volunteered 400+ hours for his campaign, I have to say I think he'll fold again. He should have listened to Rahm Emmanuel and played hardball. BTW, does the "super committee sound a bit unconstitutional? The Constitution set up a definite system of legislation, and the "super committee" seems to violate it. For example, all revenue bills must originate in the House, not a joint committee.

You are right.  Obama must stand firm.  There is indication in every quarter that Americans are plain fed up.  But I am hopefull about this Super Committee.  Today, Republican Congressman Fred Upton said, "Being from Michigan, where families have endured 31 consecutive months of double-digit unemployment, I know how important it is to get our economy back on track."  We should start by taking both parties at their word that they want to make this work.


There have been hopes that some provisions of the Affordable Care Act, as they phase in, may provide relief for families hurt by rising health care bills and costs. To what extent is the bill, and health care in general, relevant to the President's re-election prospects?

The tricky part of the Affordable Care Act is that many Americans will not begin to see decreases in health care premiums and out-of-pocket expenses until the reforms are fully implemented in 2014.  President Obama must do a better job explaining to the American public what this bill means and how it will impact their famiy pocketbooks.  In Massachusetts, when the law was fully implemented, health premiums in the individual health market decreased by 40%, compared to increasing by 14% nationally.  Obama needs to explain this loud and clear.

In the 2008 election and throughout his Presidency, President Obama has supported policies that help working families, including endorsing the Healthy Families Act (a proposed nationwide paid sick days law) and funding for state paid family and medical leave programs. These policies are highly popular with voters across the board and are particularly mobilizing for the Democratic base. What advice do you have for the President in terms of spotlighting these issues and promoting these and similar policies that will help working families to show voters that he is on their side?

The issues of workers begin unable to combine their need to work and earn a family income and their need to care for their chidren and ailing relatives is a real issue that has not been adequately addressed.  According to a study by Elizabeth Warren, a family today is 10 times more likely to have a wage earner miss work because of an ill child than a family in the 1970s.  The recent paid sick days law in Connecticut shows that this issue is an issues that the electorate cares about and that can get done.  President Obama should follow Connecticut's lead.


How much do you think the issue of the economy will hurt Obama? It seems like everyone is really mad right now, but will that die down?

The issue of the economy -- and particularly the issue of the lack of jobs in America -- will definitely hurt President Obama.  The percent of Americans who hold jobs is at a 28-year low - only 58% of Americans are working.  Unemployment remains at 9 percent and there is not much prospect that it will get lower.  President Obama started his Administration by infusing the economy with stimulus through the economic recovery package.  He must not allow this current budget negotiations to end with only cuts and job losses.

Is the fact that out of pocket health care expenses are rising part of the problem or part of the solution? Is having a larger number of Americans exposed to the actual cost of health care unambiguously a bad thing?

It certainly is a wake up call for Americans to see their premiums and out of pocket expenses increase.  It means that as the costs increase, Americans will demand a solution.  The struggle is that a solution is coming, but not for several years.  In the meantime, the hardest hit Americans - low and middle-income families -- are spending an inordinate amount of their family incomes on health care.  A family purchasing insurance on the individual market is spending an average of 22 percent of household income on health care.  But most Americans are opposed to the individual mandate to purchase health care and don't understand how it will relate to helping lower their own health costs.  President Obama must explain it.

How can Obama improve job prospects in the down economy? Doesn't the debt ceiling fiasco prevent him from spending more money on job creation (and public works projects)?

There is a serious imbalance in the economic recovery in the public and private sector.  Since May 2010, the private sector has gained jsut over 2 million jobs, but the public sector has lost nearly 1 mllion jobs.  The threatened cuts in government spending will mean more public sector job losses that will have a ripple effect in the private sector.  President Obama and Congress can try to ameliorate these loses by raising revenues instead of relying solely on a strategy of cut, cut, cut as demanded by the Republicans.

Does the economy need our population? Shouldn't we be talking about things to reduce the size of the labor force, like cutting the hours in a workweek or designing half-time jobs for parents?

This is a creative solution.  We still have millions of Americans out of work and those who are working are often stretched to the limit.  Creativity in job-sharing and flexible work hours for workers to allow more workers to enter the labor market could start to solve our unemployment problem and our problem of workers needing more time for families.

Ms. O'Leary, has the GOP once again become the "party of no"? Should the President name them as such? Why is revenue critical to bringing back jobs and the rest of the economy, and how can the President make that case?

Americans are blaming both the President and Republicans.  They are simply fed up with the lack of ability to work together.  The exteme partisanship in the House combined with the requirement of a super-majority for any legislation to pass the Senate is styming our country's ability to solve its problems.  The President does need to hold the Republicans accountable and needs to lead the way to fix our broken government.

I don't understand why Obama has been so bashful about discussing further stimulus spending. Obviously, he can't get a stimulus through this Congress but why not run for re-election on the need for significant New Deal style spending to boost employment (with deficit reduction to come after the economy recovers). Set up a stark contrast between the two parties and let the voters decide. As it is now, both the Republicans and Obama seem to care only about deficit reduction.

Yes, I agree.  President Obama has either been shy or ineffective in communicating his successes -- both with regard to the economic stimulus and the health reform law.  He needs to show how these measures are and will help Americans and he needs to figure out a way to stay true to the principles behind those laws and build upon them.  Right now, we are on a path to dismantle both of these great accomplishments.

You tremendous experience on economic and family policy from inside and outside of government. What are the top three things you think President Obama and his Administration should tackle in the next year?

(1)  Jobs, jobs, jobs - that allow families to earn a real family income and still take care of responsibilities at home

(2) Assisting in households in lessening their debts - home loans and general

(3)  Helping lower health care costs

California successfully implemented the nation’s first paid family leave program about six years ago. Are there lessons there for Obama? And is it possible to recreate that program nationwide in this double-dip recession?

It is counterintuitive to think about paid family leave and paid sick days in a recession, but in fact our experience here in California shows that the program has helped millions of Californians take the leave they need to care for their families and then go back to work and keep earning a family income.  This help businesses and families.  President Obama should do more to talk about the stress and strain on families and offer solutions like paid sick day and paid family leave.

"Since May 2010, the private sector has gained just over 2 million jobs, but the public sector has lost nearly 1 million jobs." Isn't the removal of 1 million public sector jobs what the Republicans want? How come they don't seem to get "credit" for this contribution to the unemployment number.

Yes, with the budget deal now in the works, we should expect to see more and more public sector job losses.  President Obama must explain this impact on our communities and must try to work to stop these losses.

Any addiitonal cuts in entitlement programs will, presumably, make it harder on American families. Why has it been so difficult for President Obama to make his case with the voters for additonal taxes on incomes over $250,000?. revenue from those taxes could help avoid further cuts in programs that benefit families. But the president hasn't been able to make that connection.

Polling suggests that entitlement cuts continue to be unpopular across the political spectrum.  But a CNN poll in July showed that two-thirds of Americans want to see revenue raised combined with spending cuts in order to avoid major cuts to Social Security and Medicare. 

I remember now having a conversation with a friend, who was a Hillary supporter, back in 2008. Her argument was that, setting aside his rhetoric Obama had not demonstrated the ability to lead. Looking back, she was right. Hillary certainly would have shown more guts than Obama has to this point.

The country is lucky that we have both President Obama and Secretary of State Hillary Clinton leading our nation.  These problems are global problems and we need our best leaders helping on all fronts.

What can President Obama do to help struggling home owners that he hasn't already done? And is it too late? That is, would any program to address home owner issues be seen as political posturing?

Homeownership is a serious problem and will continue to be.  President Obama needs to do more to allow struggling homeowners to refinance with  low-interest, government backed loans.

How can Republicans win any political points against Obama when they're threatening to cut funds to social security and medicare? Obama's election chances may be bad, but Republicans' are worse.

Yes, this is not a problem that will be pinned solely on President Obama.  The Republicans need a solution just as much as the Democrats and many in the Republican party seemed to have received the message that cutting Medicare is not popular.  But spending cuts alone will not solve our problem.  The extremists in the Repubican party need to stop holding the moderates hostage and allow for a real mix of reforms to be put forward.  Otherwise, it will be the Republicans who lose in 2012.

Promoting policies that help workers keep good jobs and support economic recovery is a priority. In your work, you've suggested that reform of family and medical leave laws would be one way to achieve this goal. Can you please explain what you mean by this?

Yes, jobs alone are not enough.  If a worker gets a good job and then loses it because the worker has no affordable chid care, no family leave, no paid sick days, then we are back where we started.  In a world in which less than a quarter of families have an adult at home caring for children, we need jobs that are responsive to modern workers.  Stabilzing jobs through labor policies that support working families will help family economic security and our larger economy.

It seems that the economy of the previous decade or so, to the extent it relied on real estate, was a house built on sand. That is, millions of workers were employed building McHouses (if not McMansions) that were grossly overvalued and whose owners, in many instances, couldn't afford them anyway. The obvious solution to employing a lot of these now-unemployed workers is infrastructure projects. How do you sell the public on a huge new push for infrastructure investment when you know the other side (teabaggers, et al) will just paint it as more "government spending"?

Yes, the fact of the matter is we need to realign our economy.  Americans need jobs.  The President has called for major infrastructure projects and has called for support of jobs for the new, green economy.  More needs to be done, but you are right:  It will not happen without government spending and investment.  The fact of the matter is we cannot have it all.  Tough choices will have to be made.  Vital services will be cut.  But we need leaders that will invest in government projects that will create jobs.  Spending cuts should be evaluated not just on their short-term gain to the federal budget, but on the ripple effect the cuts have on the economy.

Can you say a bit more about how these policies will help families and how they tie in to a broader narrative about building stronger families and a stronger private sector?

Let me leave you with this thought that builds on some of my previous answers.  We need to consider the basic fact that small children need care, as do ailing and elderly family members.  If all able-bodied adults in the family are working, then the family has to purchase substitue care.  But cuts are cutting programs that provide in-home serivces to the elderly and child care for low-income workers.  And employers often do not have policies for workers that allow them to take leave when needed to provide critical care.  We can't think of these two problems in silos, but need to consider them together.  How do ensure that our families are cared for by providing critical fuding to allow families to purchase care and by allowing workers to take leave when their is no substitute for Mom or Dad?

Thank you all for today's lively discussion.  Our country's economic situation provides a serious challenge for our middle class and low-income families.  In order to solve these problems, we'll need creativity on the part of our political leaders and continued civil and civic discussion like the one we had today.  It was a treat to answer your questions. 

All the best,

Ann O'Leary

In This Chat
Ann O'Leary
Ann O'Leary is Executive Director of the Berkeley Center on Health, Economic & Family Security (Berkeley CHEFS) at the UC Berkeley School of Law, and a Senior Fellow with the Center for American Progress. Previously, O'Leary served as a Deputy City Attorney for the City of San Francisco, a law clerk to U.S. Ninth Circuit Court of Appeals Judge John T. Noonan, Jr., and from 2001 to 2003 as legislative director for Senator Hillary Rodham Clinton. Prior to that, O'Leary served in a number of positions in the Clinton Administration, including as special assistant to the President in the Domestic Policy Council, policy advisor to the First Lady, and senior policy advisor to the Secretary of Education. She sits on the boards of Public Advocates and the East Bay Community Law Center. O'Leary also served as a volunteer policy advisor to the Hillary Clinton for President campaign on issues related to children and working families and on the Obama-Biden Transition Team, where she advised the incoming Administration on early childhood education issues.

Together with Heather Boushey, O'Leary co-edited The Shriver Report: A Woman's Nation Changes Everything (Simon & Schuster ebook 2009). O'Leary received her bachelor's degree from Mount Holyoke College, her master's degree from Stanford University, and her law degree from UC Berkeley School of Law.
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