POLITICS

4 Ways The State Of The Union Got Stronger Under Obama

There are still lots of problems, but things are getting better.
Expect more smiles like this one when President Barack Obama gives his State of the Union address on Tuesday night.&nbsp
Expect more smiles like this one when President Barack Obama gives his State of the Union address on Tuesday night. 

President Barack Obama delivers his final State of the Union address on Tuesday evening, and this speech won’t be like the ones he has given previously.

In the past, Obama has used the address primarily to sketch out a specific, point-by-point agenda for the coming year. This time, aides have said, the president will be taking a broader view.

That will mean, in part, taking stock of where he has taken the country in the last seven years. Obama is poised to make the case that the country is a better place than it was on his first Inauguration Day -- not perfect, for sure, but moving in the right direction.

Republicans, who routinely call the Obama presidency a "disaster," won’t believe it. And neither may most Americans, given that majorities consistently tell pollsters they think the U.S. is on the “wrong track.”

But when it comes to four key areas of domestic policy -- the economy, health care, the federal budget and the environment -- Obama will have the better argument.

THE ECONOMY

The economy was in free fall when Obama became president, shedding more than 800,000 jobs a month. One year later, the job market was growing again, and it has been ever since. The private sector has now been adding jobs for 70 consecutive months. That's a record. And last month the government's payroll report suggested a net gain of 292,000 jobs, which is a lot. ("Yabba dabba doo" was how University of Michigan economist Justin Wolfers responded to the news on Twitter.)

One of the best ways to measure the job market is to use the employment-to-population ratio, and to focus exclusively on “prime age” workers -- that is, people between the ages of 18 and 54 -- in order to account for demographic effects, at least in part. That ratio fell through early 2010, leveled off for about a year, and then began a steady rise.

It’s now at 77.2 percent. That is higher than it was when Obama took office, and higher still than it was a few months later, as the effects of the Great Recession were still rippling through the economy and before Obama’s economic policies could have any impact. It hasn’t reached its pre-recession peak but, then, it was a really, really bad recession.

As Paul Krugman noted on Monday, presidents are rarely as responsible for economic performance as everybody thinks. Booms follow busts; that’s the nature of business cycle. But Obama’s policies certainly didn’t hurt the economy, as his critics predicted they would, and the Recovery Act helped -- by financing relief payments, filling empty state and local government coffers, financing infrastructure and giving tax breaks to the poor and middle class.

The American economy still has major weaknesses. As organizations like the Economic Policy Institute have pointed out repeatedly, wages aren't rising that quickly. The poor and middle class have fallen way behind the rich. But average Americans have had stagnant incomes for basically three decades, except for a brief interlude during the 1990s boom. Obama's policies, which included higher taxes on the wealthy and more money for programs that help the working poor, at least mitigated the problem.

HEALTH CARE

Conservatives say the Affordable Care Act has been a “train wreck.” That’s not consistent with the available evidence.

As of last year, the percentage of nonelderly Americans without health insurance was 10.5 percent, according to the latest available statistics from the federal government’s National Health Insurance Survey. That’s not just lower than it was before the health care law took effect, and lower than it was at the beginning of Obama’s term -- that’s the lowest this survey has ever recorded.

Insurance isn’t the same as access to care and plenty of people with coverage say they still struggle with medical bills, whether because insurance premiums are too high or because they can’t keep up with out-of-pocket expenses. But evidence from the NHIS and a large body of academic research, some recent and some older, suggest that overall access has improved because of the health care law.

Meanwhile, overall health care costs were rising at historically low rates until last year, when, as predicted, the sudden expansion of insurance coverage bumped up consumption. Even with that bump, inflation looks nothing like the double-digit increases of previous years. Oh, and deadly hospital errors are on the decline. Experts disagree about what role the Affordable Care Act and other policy changes played in this improvement but, again, they certainly didn’t hurt and they probably helped.

THE FEDERAL BUDGET

The deficit was soaring when Obama came into office, partly because the recession caused tax revenues to plunge and partly because the government deliberately passed new spending and tax cuts -- without offsetting revenue -- in order to stop the job losses and start a recovery. But the deficit peaked in 2009 and has been coming down ever since. As a percentage of gross domestic product, the deficit is now lower than it was in 2008.

One way to appreciate the impact is to see how the projections of future deficits have changed since that time. One calculation by the Democratic staff of the Senate Budget Committee suggested that, between 2010 and 2014, deficit projections came down enough to save the government an extra $4.7 trillion over the course of the next decade.

That figure alone doesn’t tell the whole story. One reason for the lower deficits is reduced spending on important investments in research and infrastructure. Over time, that could hurt the country more than the extra deficit spending would have. The 2014 figures also don’t reflect last month’s agreement to make some temporary tax cuts permanent.

Even with the improvement, the country faces a serious long-term financing problem. Projections suggest the deficit will climb in future years, putting an ever greater strain on federal finances -- and, eventually, the economy. But things looked worse when Obama was first coming into office.

THE ENVIRONMENT

The planet is still warming, but carbon emissions in the U.S. are declining. As with the economy and health care and the deficit, that reflects a whole bunch of factors, many of which have nothing to do with Obama. The recession, for example, played a role: When the economy slows down, both businesses and individuals end up consuming less energy, reducing the output of greenhouse gases.

But government policies have likely helped. One place to see it is in the changes in fuel economy for vehicles, which the graph above shows. That reflects greater demand for efficient cars, obviously, but it also reflects tighter government requirements on mileage. Another is energy production from renewable energy sources -- which crept up slowly until around 2008, at which point it started climbing more quickly.

Some of the improvement is a product of changes that predate Obama. But some are the result of policies he enacted, frequently over the strong objection of his critics.

* * *

By themselves, these things don’t mean that Obama’s presidency has been a success -- or that honest people on either end of the ideological spectrum can’t find legitimate grounds for criticisms.

Plenty of liberals say Obama’s reforms haven’t done enough -- that unemployment could be even lower or wages could be higher, or that the changes to the health care system haven’t done enough to improve access and affordability. They look at the Recovery Act and the Affordable Care Act, along with the fiscal agreements that Obama made with the Republican Congress in later years, and see all kinds of concessions they think Obama didn't need to make.

More conservative critics say the trade-offs of Obama’s policies -- bigger government, higher taxes -- have left the country worse off. They point out, for example, that many young and healthy people now pay higher premiums because insurers can't sell skimpy policies or base pricing on medical risk. As for the economy, they say it would be performing much better if not for Obama's new regulations on everything from emissions to the financial sector. 

And that’s to say nothing of foreign policy, where Obama's actions elicit equally passionate criticisms. But using some of the most basic, straightforward criteria about domestic policy, Obama can say honestly that the state of the union is strong -- or, at least, stronger than it was when he took office seven years ago.

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