Earlier
today, President Barack Obama delivered the first in a series of speeches regarding
the economy. Text provided at
this link and below.
Eight
years ago, I came here to deliver the commencement address for the class of
2005. Things were a little different
back then. I didn’t have any gray hair,
for example. Or a motorcade. I didn’t even have a teleprompter. It was my first big speech as your newest
senator, and I spent my time talking about what a changing economy was doing to
the middle class – and what we, as a country, needed to do to give every
American a chance to get ahead in the 21st century.
You
see, I’d just spent a year traveling this state and listening to your stories –
of proud Maytag workers losing their jobs when their plant moved down to
Mexico; of teachers whose salaries weren’t keeping up with the rising cost of
groceries; of young people who had the drive but not the money to afford a
college education.
They
were the stories of families who worked hard and believed in the American
Dream, but felt that the odds were increasingly stacked against them. And they were right.
In the
period after World War II, a growing middle class was the engine of our
prosperity. Whether you owned a company,
swept its floors, or worked anywhere in between, this country offered you a
basic bargain – a sense that your hard work would be rewarded with fair wages
and benefits, the chance to buy a home, to save for retirement, and, above all,
to hand down a better life for your kids.
But
over time, that engine began to stall.
That bargain began to fray.
Technology made some jobs obsolete.
Global competition sent others overseas.
It became harder for unions to fight for the middle class. Washington
doled out bigger tax cuts to the rich and smaller minimum wage increases for
the working poor. The link between higher productivity and people’s wages and
salaries was severed – the income of the top 1% nearly quadrupled from 1979 to
2007, while the typical family’s barely budged.
Towards
the end of those three decades, a housing bubble, credit cards, and a churning
financial sector kept the economy artificially juiced up. But by the time I took office in 2009, the
bubble had burst, costing millions of Americans their jobs, their homes, and
their savings. The decades-long erosion
of middle-class security was laid bare for all to see and feel.
Today,
five years after the start of that Great Recession, America has fought its way
back.
Together,
we saved the auto industry, took on a broken health care system, and invested
in new American technologies to reverse our addiction to foreign oil and double
wind and solar power.
Together,
we put in place tough new rules on big banks, and protections that cracked down
on the worst practices of mortgage lenders and credit card companies. We changed a tax code too skewed in favor of
the wealthiest at the expense of working families, locking in tax cuts for 98%
of Americans, and asking those at the top to pay a little more.
Add it
all up, and over the past 40 months, our businesses have created 7.2 million
new jobs. This year, we are off to our
strongest private-sector job growth since 1999.
And because we bet on this country, foreign companies are, too. Right now, more of Honda’s cars are made in
America than anywhere else. Airbus will
build new planes in Alabama. Companies
like Ford are replacing outsourcing with insourcing and bringing more jobs
home. We sell more products made in
America to the rest of the world than ever before. We now produce more natural gas than any
country on Earth. We’re about to produce
more of our own oil than we buy from abroad for the first time in nearly 20
years. The cost of health care is
growing at its slowest rate in 50 years.
And our deficits are falling at the fastest rate in 60 years.
Thanks
to the grit and resilience of the American people, we’ve cleared away the
rubble from the financial crisis and begun to lay a new foundation for
stronger, more durable economic growth.
In our personal lives, we tightened our belts, shed debt, and refocused
on the things that really matter. As a
country, we’ve recovered faster and gone further than most other advanced
nations in the world. With new American
revolutions in energy, technology, manufacturing, and health care, we are
actually poised to reverse the forces that have battered the middle class for
so long, and rebuild an economy where everyone who works hard can get ahead.
But I’m
here today to tell you what you already know – we’re not there yet. Even though our businesses are creating new
jobs and have broken record profits, nearly all the income gains of the past
ten years have continued to flow to the top 1%.
The average CEO has gotten a raise of nearly 40% since 2009, but the
average American earns less than he or she did in 1999. And companies continue to hold back on hiring
those who have been out of work for some time.
Today,
more students are earning their degree, but soaring costs saddle them with
unsustainable debt. Health care costs
are slowing, but many working families haven’t seen the savings yet. And while the stock market rebound has helped
families get back much of what they lost in their 401ks, millions of Americans
still have no idea how they’ll ever be able to retire. In many ways, the trends that I spoke of here
in 2005 – of a winner-take-all economy where a few do better and better, while
everybody else just treads water – have been made worse by the recession.
This
growing inequality isn’t just morally wrong; it’s bad economics. When middle-class families have less to
spend, businesses have fewer customers. When wealth concentrates at the very
top, it can inflate unstable bubbles that threaten the economy. When the rungs on the ladder of opportunity
grow farther apart, it undermines the very essence of this country.
That’s
why reversing these trends must be Washington’s highest priority. It’s certainly my highest priority. Unfortunately, over the past couple of years
in particular, Washington hasn’t just ignored the problem; too often, it’s made
things worse.
We’ve
seen a sizable group of Republican lawmakers suggest they wouldn’t vote to pay
the very bills that Congress rang up – a fiasco that harmed a fragile recovery
in 2011, and one we can’t afford to repeat.
Then, rather than reduce our deficits with a scalpel – by cutting
programs we don’t need, fixing ones we do, and making government more efficient
– this same group has insisted on leaving in place a meat cleaver called the
sequester that has cost jobs, harmed growth, hurt our military, and gutted
investments in American education and scientific and medical research that we
need to make this country a magnet for good jobs.
Over
the last six months, this gridlock has gotten worse. A growing number of Republican Senators are
trying to get things done, like an immigration bill that economists say will
boost our economy by more than a trillion dollars. But a faction of Republicans in the House
won’t even give that bill a vote, and gutted a farm bill that America’s farmers
and most vulnerable children depend on.
If you
ask some of these Republicans about their economic agenda, or how they’d
strengthen the middle class, they’ll shift the topic to “out-of-control”
government spending – despite the fact that we have cut the deficit by nearly
half as a share of the economy since I took office. Or they’ll talk about government assistance
for the poor, despite the fact that they’ve already cut early education for
vulnerable kids and insurance for people who’ve lost their jobs through no
fault of their own. Or they’ll bring up
Obamacare, despite the fact that our businesses have created nearly twice as
many jobs in this recovery as they had at the same point in the last recovery,
when there was no Obamacare.
With an
endless parade of distractions, political posturing and phony scandals,
Washington has taken its eye off the ball.
And I am here to say this needs to stop.
Short-term thinking and stale debates are not what this moment requires. Our focus must be on the basic economic
issues that the matter most to you – the people we represent. And as Washington prepares to enter another
budget debate, the stakes for our middle class could not be higher. The countries that are passive in the face of
a global economy will lose the competition for good jobs and high living
standards. That’s why America has to
make the investments necessary to promote long-term growth and shared
prosperity. Rebuilding our manufacturing
base. Educating our workforce. Upgrading our transportation and information
networks. That’s what we need to be
talking about. That’s what Washington
needs to be focused on.
And
that’s why, over the next several weeks, in towns across this country, I will
engage the American people in this debate.
I will lay out my ideas for how we build on the cornerstones of what it
means to be middle class in America, and what it takes to work your way into
the middle class in America. Job
security, with good wages and durable industries. A good education. A home to call your own. Affordable health care when you get
sick. A secure retirement even if you’re
not rich. Reducing poverty and
inequality. Growing prosperity and
opportunity.
Some of
these ideas I’ve talked about before, and some will be new. Some will require Congress, and some I will
pursue on my own. Some will benefit
folks right away; some will take years to fully implement. But the key is to break through the tendency
in Washington to careen from crisis to crisis.
What we need isn’t a three-month plan, or even a three-year plan, but a
long-term American strategy, based on steady, persistent effort, to reverse the
forces that have conspired against the middle class for decades.
Of
course, we’ll keep pressing on other key priorities, like reducing gun
violence, rebalancing our fight against al Qaeda, combating climate change, and
standing up for civil rights and women’s rights. But if we don’t have a growing, thriving
middle class, we won’t have the resources or the resolve; the optimism or sense
of unity that we need to solve these other issues.
In this
effort, I will look to work with Republicans as well as Democrats wherever I
can. I believe there are members of both
parties who understand what’s at stake, and I will welcome ideas from anyone,
from across the political spectrum. But
I will not allow gridlock, inaction, or willful indifference to get in our
way. Whatever executive authority I have
to help the middle class, I’ll use it.
Where I can’t act on my own, I’ll pick up the phone and call CEOs, and
philanthropists, and college presidents – anybody who can help – and enlist
them in our efforts. Because the choices
that we, the people, make now will determine whether or not every American will
have a fighting chance in the 21st century.
Let me
give you a quick preview of what I’ll be fighting for and why.
The
first cornerstone of a strong and growing middle class has to be an economy
that generates more good jobs in durable, growing industries. Over the past four years, for the first time
since the 1990s, the number of American manufacturing jobs hasn’t gone down;
they’ve gone up. But we can do
more. So I’ll push new initiatives to
help more manufacturers bring more jobs back to America. We’ll continue to focus on strategies to
create good jobs in wind, solar, and natural gas that are lowering energy costs
and dangerous carbon pollution. And I’ll
push to open more manufacturing innovation institutes that turn regions left
behind by global competition into global centers of cutting-edge jobs. Let’s tell the world that America is open for
business – including an old site right here in Galesburg, over on Monmouth
Boulevard.
Tomorrow,
I’ll also visit the port of Jacksonville, Florida to offer new ideas for doing
what America has always done best: building things. We’ve got ports that aren’t ready for the new
supertankers that will begin passing through the new Panama Canal in two years’
time. We’ve got more than 100,000
bridges that are old enough to qualify for Medicare. Businesses depend on our transportation
systems, our power grids, our communications networks – and rebuilding them
creates good-paying jobs that can’t be outsourced. And yet, as a share of our economy, we invest
less in our infrastructure than we did two decades ago. That’s inefficient at a time when it’s as cheap
as it’s been since the 1950s. It’s
inexcusable at a time when so many of the workers who do this for a living sit
idle. The longer we put this off, the
more expensive it will be, and the less competitive we will be. The businesses of tomorrow won’t locate near
old roads and outdated ports; they’ll relocate to places with high-speed
internet; high-tech schools; systems that move air and auto traffic faster, not
to mention get parents home to their kids faster. We can watch that happen in other countries,
or we can choose to make it happen right here, in America.
In an
age when jobs know no borders, companies will also seek out the country that
boasts the most talented citizens, and reward them with good pay. The days when the wages for a worker with a
high-school degree could keep pace with the earnings of someone who got some
higher education are over. Technology
and global competition aren’t going away.
So we can either throw up our hands and resign ourselves to diminished
living standards, or we can do what America has always done: adapt, pull
together, fight back and win.
Which
brings me to the second cornerstone of a strong middle class: an education that
prepares our children and our workers for the global competition they’ll face.
If you
think education is expensive, wait until you see how much ignorance costs in
the 21st century. If we don’t make this
investment, we’ll put our kids, our workers, and our country at a competitive
disadvantage for decades. So we must
begin in the earliest years. That’s why
I’ll keep pushing to make high-quality preschool available to every four
year-old in America – not just because we know it works for our kids, but
because it provides a vital support system for working parents. I’ll also take action to spur innovation in
our schools that don’t require Congress.
Today, for example, federal agencies are moving on my plan to connect
99% of America’s students to high-speed internet over the next five years. And
we’ve begun meeting with business leaders, tech entrepreneurs, and innovative
educators to identify the best ideas for redesigning our high schools so that
they teach the skills required for a high-tech economy.
We’ll
also keep pushing new efforts to train workers for changing jobs. Here in
Galesburg, many of the workers laid off at Maytag chose to enroll in retraining
programs like the ones at Carl Sandburg College. And while it didn’t pay off for everyone,
many who retrained found jobs that suited them even better and paid even more.
That’s why I asked Congress to start a Community College to Career initiative,
so that workers can earn the skills that high-tech jobs demand without leaving
their hometown. And I’m challenging CEOs
from some of America’s best companies to hire more Americans who’ve got what it
takes to fill that job opening, but have been laid off so long no one will give
their resume an honest look.
I’m
also going to use the power of my office over the next few months to highlight
a topic that’s straining the budgets of just about every American family – the
soaring cost of higher education.
Three
years ago, I worked with Democrats to reform the student loan system so that
taxpayer dollars stopped padding the pockets of big banks, and instead helped
more kids afford college. I capped loan repayments at 10% of monthly income for
responsible borrowers. And this week,
we’re working with both parties to reverse the doubling of student loan rates
that occurred a few weeks ago because of Congressional inaction.
It’s
all a good start – but it isn’t enough.
Families and taxpayers can’t just keep paying more and more into an
undisciplined system; we’ve got to get more out of what we pay for. Some colleges are testing new approaches to
shorten the path to a degree, or blending teaching with online learning to help
students master material and earn credits in less time. Some states are testing new ways to fund college
based not just on how many students enroll, but how well they do. This
afternoon, I’ll visit the University of Central Missouri to highlight their
efforts to deliver more bang for the buck.
And in the coming months, I will lay out an aggressive strategy to shake
up the system, tackle rising costs, and improve value for middle-class students
and their families.
Now, if
a good job and a good education have always been key stepping stones into the
middle class, a home of your own has been the clearest expression of
middle-class security. That changed
during the crisis, when millions of middle-class families saw their home values
plummet. Over the past four years, we’ve
helped more responsible homeowners stay in their homes, and today, sales are
up, prices are up, and fewer Americans see their homes underwater.
But
we’re not done yet. The key now is to
encourage homeownership that isn’t based on bubbles, but is instead based on a
solid foundation, where buyers and lenders play by the same set of rules, rules
that are clear, transparent, and fair.
Already, I’ve asked Congress to pass a good, bipartisan idea – one that
was championed by Mitt Romney’s economic advisor – to give every homeowner the
chance to refinance their mortgage and save thousands of dollars a year. I’m also acting on my own to cut red tape for
responsible families who want to get a mortgage, but the bank says no. And we’ll work with both parties to turn the
page on Fannie and Freddie, and build a housing finance system that’s rock-solid
for future generations.
Along
with homeownership, the fourth cornerstone of what it means to be middle class
in this country is a secure retirement.
Unfortunately, over the past decade, too many families watched their
retirement recede from their grasp.
Today, a rising stock market has millions of retirement balances
rising. But we still live with an
upside-down system where those at the top get generous tax incentives to save,
while tens of millions of hardworking Americans get none at all. As we work to
reform our tax code, we should find new ways to make it easier for workers to
put money away, and free middle-class families from the fear that they’ll never
be able to retire. And if Congress is
looking for a bipartisan place to get started, they don’t have to look far:
economists show that immigration reform that makes undocumented workers pay
their full share of taxes would actually shore up Social Security for years.
Fifth,
I will keep focusing on health care, because middle-class families and small
business owners deserve the security of knowing that neither illness nor
accident should threaten the dreams you’ve worked a lifetime to build.
As we
speak, we are well on our way to fully implementing the Affordable Care
Act. If you’re one of the 85% of
Americans who already have health insurance, you’ve got new benefits and better
protections you didn’t have before, like free checkups and mammograms and
discounted medicine on Medicare. If you
don’t have health insurance, starting October 1st, private plans will actually
compete for your business. You can
comparison shop in an online marketplace, just like you would for TVs or plane
tickets, and buy the one that fits your budget and is right for you. And if you’re in the up to half of all
Americans who’ve been sick or have a preexisting condition, this law means that
that beginning January 1st, insurance companies finally have to cover you, and
at the same rates they charge everybody else.
Now, I
know there are folks out there who are actively working to make this law
fail. But despite a
politically-motivated misinformation campaign, the states that have committed
themselves to making this law work are finding that competition and choice are
actually pushing costs down. Just last
week, New York announced that premiums for consumers who buy their insurance in
these online marketplaces will be at least 50% less than what they pay
today. That’s right – folks’ premiums in
the individual market will drop by 50%.
For them, and for the millions of Americans who have been able to cover
their sick kids for the first time, or have been able to cover their employees
more cheaply, or who will be getting tax breaks to afford insurance for the
first time – you will have the security of knowing that everything you’ve
worked hard for is no longer one illness away from being wiped out.
Finally,
as we work to strengthen these cornerstones of middle-class security, I’m going
to make the case for why we need to rebuild ladders of opportunity for all
those Americans still trapped in poverty.
Here in America, we’ve never guaranteed success. More than some other countries, we expect
people to be self-reliant, and we’ve tolerated a little more inequality for the
sake of a more dynamic, more adaptable economy.
But that’s always been combined with a commitment to upward mobility –
the idea that no matter how poor you started, you can make it with hard work
and discipline.
Unfortunately,
opportunities for upward mobility in America have gotten harder to find over
the past 30 years. That’s a betrayal of
the American idea. And that’s why we
have to do a lot more to give every American the chance to work their way into
the middle class.
The
best defense against all of these forces – global competition and economic
polarization – is the strength of community.
We need a new push to rebuild run-down neighborhoods. We need new partnerships with some of the
hardest-hit towns in America to get them back on their feet. And because no one who works full-time in
America should have to live in poverty, I will keep making the case that we
need to raise a minimum wage that in real terms is lower than it was when
Ronald Reagan took office. We are not a
people who allow chance of birth to decide life’s big winners and losers; and
after years in which we’ve seen how easy it can be for any of us to fall on
hard times, we cannot turn our backs when bad breaks hit any of our fellow
citizens.
Good
jobs. A better bargain for the middle
class and folks working to join it. An
economy that grows from the middle-out.
This is where I will focus my energies – not just over the next few
months, but for the remainder of my presidency.
These are the plans that I will lay out across this country. But I won’t be able to do it alone, and I’ll
be calling on all of us to take up this cause.
We’ll
need our businesses, the best in the world, to pressure Congress to invest in
our future, and set an example by providing decent wages and salaries to their
own employees. And I’ll highlight the
ones that do just that – companies like Costco, which pays good wages and
offers good benefits; or the Container Store, which prides itself on training
its workers and on employee satisfaction – because these companies prove that
this isn’t just good for their business, it’s good for America.
We’ll
need Democrats to question old assumptions, be willing to redesign or get rid
of programs that no longer work, and embrace changes to cherished priorities so
that they work better in this new age.
For if we believe that government can give the middle class a fair shot
in this new century, we have an obligation to prove it.
And
we’ll need Republicans in Congress to set aside short-term politics and work
with me to find common ground. The fact
is, there are Republicans in Congress right now who privately agree with me on
many of the ideas I’ll be proposing, but worry they’ll face swift political
retaliation for saying so. Others will
dismiss every idea I put forward either because they’re playing to their most
strident supporters, or because they have a fundamentally different vision for
America – one that says inequality is both inevitable and just; one that says
an unfettered free market without any restraints inevitably produces the best
outcomes, regardless of the pain and uncertainty imposed on ordinary families.
In
either case, I say to these members of Congress: I am laying out my ideas to
give the middle class a better shot. Now
it’s time for you to lay out yours. If
you’re willing to work with me to strengthen American manufacturing and rebuild
this country’s infrastructure, let’s go.
If you have better ideas to bring down the cost of college for working
families, let’s hear them. If you think
you have a better plan for making sure every American has the security of
quality, affordable health care, stop taking meaningless repeal votes and share
your concrete ideas with the country. If
you are serious about a balanced, long-term fiscal plan that replaces the
mindless cuts currently in place, or tax reform that closes corporate loopholes
and gives working families a better deal, I’m ready to work – but know that I
will not accept deals that do not meet the test of strengthening the prospects
of hard-working families.
We’ve
come a long way since I first took office.
As a country, we’re older and we’re wiser. And as long as Congress doesn’t manufacture
another crisis – as long as we don’t shut down the government just as the
economy is getting traction, or risk a U.S. default over paying bills we’ve
already racked up – we can probably muddle along without taking bold
action. Our economy will grow, though
slower than it should; new businesses will form, and unemployment will keep
ticking down. Just by virtue of our size
and our natural resources and the talent of our people, America will remain a
world power, and the majority of us will figure out how to get by.
But if
that’s our choice – if we just stand by and do nothing in the face of immense
change – understand that an essential part of our character will be lost. Our founding precept about wide-open
opportunity and each generation doing better than the last will be a myth, not
reality. The position of the middle class will erode further. Inequality will continue to increase, and
money’s power will distort our politics even more. Social tensions will rise, as various groups
fight to hold on to what they have, and the fundamental optimism that has
always propelled us forward will give way to cynicism or nostalgia.
That’s
not the vision I have for this country.
That’s not the vision you have for this country. That is not the America we know. That’s not a vision we should settle for, or
pass on to our children. I have now run
my last campaign. I do not intend to
wait until the next one before tackling the issues that matter. I care about one thing and one thing only,
and that’s how to use every minute of the 1,276 days remaining in my term to
make this country work for working Americans again. Because I believe this is where America needs
to go. I believe this is where the
American people want to go. It may seem
hard today, but if we are willing to take a few bold steps – if Washington will
just shake off its complacency and set aside the kind of slash-and-burn
partisanship we’ve seen these past few years – our economy will be stronger a
year from now. And five years from
now. And ten years from now. More Americans will know the pride of that
first paycheck; the satisfaction of flipping the sign to “Open” on their own
business; the joy of etching a child’s height into the door of their brand new
home.
After
all, what makes us special has never been our ability to generate incredible
wealth for the few, but our ability to give everyone a chance to pursue their
own true measure of happiness. We haven’t just wanted success for ourselves –
we’ve wanted it for our neighbors, too.
That’s why we don’t call it John’s dream or Susie’s dream or Barack’s
dream – we call it the American Dream. That’s what makes this country special –
the idea that no matter who you are, what you look like, where you come from or
who you love – you can make it if you try.
One of
America’s greatest writers, Carl Sandburg, was born right here in Galesburg
over a century ago. He saw the railroad
bring the world to the prairie, and the prairie send its bounty to the world. He saw the advent of bustling new industries
and technologies; he watched populations shift; he saw fortunes made and
lost. He saw how change could be painful
– how a new age could unsettle long-settled customs and ways of life. But possessed with a frontier optimism, he
saw something more on the horizon. “I
speak of new cities and new people,” he wrote.
“…The past is a bucket of ashes…yesterday is a wind gone down, a sun
dropped in the west…there is…only an ocean of tomorrows, a sky of tomorrows.”
America,
we have made it through the worst of yesterday’s winds. And if we find the courage to keep moving
forward; if we set our eyes on the horizon, we too will find an ocean of
tomorrows, a sky of tomorrows – for America’s people, and for this great country
that we love.
Thank
you, God bless you, and God bless the United States of America.
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