Obama Revord: Economy

BARACK OBAMA RESOURCE

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REFERENCE SOURCE:

Economic Rescue, Recovery, and Rebuilding on a New Foundation

Source: WH

In 2008, the American people turned to Barack Obama to lead the country through the worst economic crisis since the Great Depression. His North Star was to make the economy work for the middle class and for those fighting to join it. He took steps to create jobs, rescue the auto industry, and rebuild the economy on a new foundation for growth and prosperity.


Bar chart that shows that when President Obama took office in January 2009, the unemployment rate was 7.8%, and at its peak in October 2009 at 10%. By November 2016, that had lowered to 4.6%. Bar chart showing that in 2009 the change in real median household income was -0.7% and in 2015 it was up to 5.2%. Bar chart showing that in 2008-2009, high school graduation rate was 75%, and in 2014-2015 the graduation rate was 83%.

Stabilized an Economy in Crisis and Laid the Groundwork for Long-Term Growth

Took steps to help the hardest-hit Americans. Without the Recovery Act’s boost to household incomes, the poverty rate would have risen an additional 1.7 percentage points—which translates into about 5.3 million additional people that would have slipped into poverty in 2010

Helping the Hardest-Hit Americans

Provided tax relief that gave the typical American family a tax cut of $3,600 over the first four years of the Administration — helping to restart job growth — and made important tax cuts permanent for working families and families with college students.

Tax Relief for Middle Class and Working Families

  • Created the Making Work Pay tax credit for families with incomes of up to $150,000, providing a credit of up to $400 for individuals and $800 for couples as the economy recovered from the depths of the Recession in 2009 and 2010.
  • Cut the payroll tax for everyone who pays it, boosting the typical family’s income by about $1,000 in 2011 and 2012 and helping about 160 million workers and their families.
  • Expanded the Child Tax Credit for low-wage working families; later made that expansion permanent in the 2015 tax and budget agreement.
  • Expanded the Earned-Income Tax Credit (EITC) for working families with more than two children and reduced EITC marriage penalties; later made those expansions permanent in the 2015 tax and budget agreement.
  • Created the American Opportunity Tax Credit (AOTC), an up to $2,500 per-year tax credit (up to $10,000 over four years) to help students and their families pay for college; later made the AOTC permanent in the 2015 tax and budget agreement.

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Secured substantial reforms to improve education for all Americans — from catalyzing reforms of K-12 education to investing in community colleges to making it easier for students to afford higher education

A Down Payment on Education

  • Catalyzed significant state education reforms to adopt higher academic standards to prepare students for college and careers, which 49 states and the District of Columbia have done; invested in great teachers and leaders; and turned around low-performing schools through $4 billion in Race to the Top competition. Following these reforms, the high school graduation rate reached its highest level ever recorded, dropout rates fell sharply for low-income and minority students, and since 2008, college enrollment for African-Americans and Hispanics has increased by more than one million students.
  • Increased maximum Pell Grant awards by $500 in the Recovery Act; later increased the maximum by more than $1,000 above the 2008 level, helping millions of students afford college.
  • Supported continuing education for American workers by increasing available funding for incumbent workers and working with companies to upskill thousands of workers.
  • Provided federal funding to prevent hundreds of thousands of teacher and first responder job losses.

Invested in building the economy of the future, from physical and technological infrastructure — including roads, bridges, and broadband — to scientific research to the largest investment in clean energy in history

Critical Investments in the Future

Brought Stability to a Financial Sector in Crisis

Restructured AIG, the world’s largest insurer, to prevent its catastrophic collapse; recovered the entire taxpayer investment plus a $22.7 billion positive return

Restructured AIG

Treasury Sells Its Final Share of AIG Common Stock

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Recapitalized the financial system so it could withstand the downturn and start lending again; recovered the entire taxpayer investment into the banks, plus a nearly $30 billion positive return

Treasury invested approximately $245 billion across five bank programs. Each of these programs was established to accomplish different goals as part of the overall effort to stabilize America’s banking system. Because of the aggressive response, the financial system stabilized and Treasury has recovered $275 billion, a nearly $30 billion positive return to the taxpayer.

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Created and conducted a comprehensive stress test for the nation’s largest banks in May 2009 to ensure they had sufficient capital to withstand a Great Depression-like scenario. The added transparency helped banks to raise $66 billion in capital from private markets within a month of the stress test.

Supervisory Capital Assessment Program & Capital Assistance Program

The Supervisory Capital Assessment Program (SCAP) and the Capital Assistance Program (CAP) were established to ensure that our major banking institutions had adequate capital buffers to withstand losses and continue to lend to businesses, large and small, and consumers to support the economy.

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Launched programs to restart crucial lending markets for student and auto loans, other forms of consumer credit, housing, and small businesses

Restarted Crucial Lending Markets

  • Expanded the Term Asset-Backed Securities Loan Facility (TALF) to kick-start a secondary lending market to lower borrowing costs and get credit flowing again, especially for student and auto loans; recovered the entire taxpayer investment.
  • Established the Public-Private Investment Program (PPIP) to create markets for the legacy securities and real estate-related assets that were at the center of the financial crisis; recovered the entire taxpayer investment of $18.6 billion plus a net positive return of more than $3.9 billion on a cash basis.
  • Launched the Small Business Administration (SBA) 7(a) Securities Purchase Program as part of the Obama Administration’s efforts to help small businesses; recovered the entire taxpayer investment plus a small positive return.

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Coordinated a global response to the financial crisis at a London G-20 meeting in April 2009 that marshaled more than $1 trillion of support to restore credit, growth, and jobs in the global economy

“During our London Summit, we and our G-20 partners agreed that we will make more than $1 trillion in financial resources available to support global growth and trade. Much of that total will go to the emerging and developing countries, which as recently as the fall of last year accounted for fully 42% of all U.S. exports.  That will improve their economic and financial health which, in turn, will help improve ours.” – Secretary Timothy F. Geithner

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Brought Stability to The Housing Sector

Made it easier for responsible homeowners to stay in their homes — avoiding foreclosures that would have hurt them and the economy and helping underwater homeowners refinance. In all, more than 10 million mortgage modification and other forms of mortgage assistance were completed to help mitigate the foreclosure crisis

Helped Families Stay in Their Homes

President Barack Obama delivers a statement to neighbors at the home of Valerie and Paul Keller in Reno, Nevada, May 11, 2012. (Official White House Photo by Pete Souza)
President Barack Obama delivers a statement to neighbors at the home of Valerie and Paul Keller in Reno, Nevada, May 11, 2012. (Official White House Photo by Pete Souza)
  • Established a loan modification program to help more than 1.5 million homeowners lower their mortgages and avoid foreclosure, with more than 4.5 million more homeowners receiving private modifications that built on the framework provided by the government model.
  • Helped underwater homeowners avoid foreclosure through programs that allow them to sell their home or reduce payments on—or extinguish—their second lien.
  • Provided a delayed payment plan of up to 12 months for unemployed homeowners.
  • Launched an Office of Housing Counseling and worked with HUD-approved housing counselors to assist millions of families in making smart and informed financial decisions, including by providing housing counseling for unemployed homeowners at job training centers.

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Established a mortgage refinancing program for underwater borrowers (i.e. those whose house is worth less than their mortgage), to help more than 3.3 million Americans overcome barriers to refinancing and lower their monthly payments

Check out our latest housing scorecard for more on our response to the housing crisis.

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Helped state and local housing finance agencies through the New Issue Bond Program to extend affordable mortgage credit to families and enable the development and rehabilitation of tens of thousands affordable rental units

New Issue Bond Program

The New Issue Bond Program filled in the financing vacuum for Housing Finance Agencies when the tax exempt market seized up during the crisis. It enabled tens of thousands of affordable multi-family units to be financed during the crisis and tens of thousands of mortgages for affordable homes to be funded through participating Housing Finance Agencies.

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Launched a program to require investors who purchase distressed Federal Housing Administration (FHA) loans to maintain the properties in a manner that avoids the kinds of vacancy and abandonment that downgrade the community

The Minimum Property Standards (MPS) establish certain minimum standards for buildings constructed under HUD housing programs. This includes new single family homes, multi-family housing and health care type facilities.

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Stepped up lending through the FHA, bolstering its capital reserves to the point where the Administration was able to lower the FHA mortgage insurance premium

Making Homeownership More Accessible and Sustainable

In 2015, the Federal Housing Administration (FHA) reduced annual mortgage insurance premiums by 0.5 percentage point from 1.35 percent to 0.85 percent. For the typical first-time homebuyer, this reduction translates into a $900 reduction in their annual mortgage payment.

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Negotiated the National Mortgage Servicing Settlement with 49 state attorneys general and major banks and mortgage companies to establish new servicing standards and provide more than $50 billion of relief to distressed homeowners

The National Mortgage Settlement

On February 9, 2012, then-Attorney General Eric Holder announced that the federal government and 49 states had reached a settlement agreement with the nation’s five largest mortgage servicers to address mortgage servicing, foreclosure, and bankruptcy abuses (the “National Mortgage Settlement”).

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Launched mortgage fraud cases against thousands of defendants

Protecting Taxpayer Dollars and Consumers Against Financial Fraud While Ensuring Competitive Markets

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Improved the quality of public housing for residents across the country through a new HUD tool that helps provide stable sources of funding for property improvements

The Rental Assistance Demonstration provides public housing authorities (PHAs) with a way to rehabilitate or repair units without depending on additional money from Congress. Congress has not provided enough funding for PHAs to keep up with capital needs. As a result, PHAs have had to make tough choices between things like repairing roofs and replacing plumbing—or worse, demolishing public housing.

Learn more about the Rental Assistance Demonstration.

Saved the American Auto Industry

The auto industry has fully exited the temporary federal programs that supported them, repaying the American taxpayer every dollar and more of what the Obama Administration committed

On December 19, 2014, Treasury announced that it had exited the last Troubled Asset Relief Program (TARP) equity investment under the Auto Industry Financing Program.

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Launched “Cash for Clunkers” to spur auto sales

Did ‘Cash-for-Clunkers’ work as intended?

A plausible interpretation of the available data, in fact, is that many of the auto sales catalyzed by the CARS program were to the kinds of thrifty people who can afford to buy a new car but normally wait until the old one is thoroughly worn out. Stimulating spending by such people acted as an incredibly positive countercyclical fiscal policy in an economy suffering from temporarily low aggregate demand.
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Reformed Wall Street

Set higher capital and liquidity standards for financial institutions both domestically and internationally

Also required the largest, most complex firms in the U.S. to meet higher capital, liquidity, and risk management standards than other firms that pose less systemic risk.

Since the crisis, banks have added more than $600 billion of additional capital, which is money they can lend and which increases their resiliency.

Established orderly liquidation authority to prevent serious harm to the entire economy and to protect taxpayers from bearing the losses of private firms by giving regulators the tools to safely wind down large, complex financial institutions that fail

Meet the Law That’s Been Quietly Protecting You and Strengthening Our Economy for the Past 6 Years

“When large, complex, or interconnected firms (like Lehman Brothers) failed during the crisis, the regulators didn’t have the tools they needed to wind them down safely, without bringing down our entire financial system. That left us with a pretty awful choice: Let our system collapse and risk another Great Depression (which nearly happened after Lehman failed), or have taxpayers step in to clean up the mess? Wall Street reform fixed that. Today, regulators have something called “orderly liquidation authority,” which is a fancy way of saying that if a big Wall Street firm implodes again, taxpayers aren’t on the hook — investors in the firm and the financial industry pick up the tab. By law, no firm is too big to fail.”

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Expanded reporting requirements for hedge funds and private equity funds

Greater Transparency: Wall Street Reform re-aligned incentives in derivatives and securitization markets, hedge fund reporting requirements, and executive compensation:

  • Derivatives Reform: Wall Street Reform is bringing oversight and transparency to the over-the-counter (OTC) derivatives markets — shedding light on complex derivatives transactions.
  • Securitization Reform: Dodd-Frank has strengthened the securitization process, to better protect investors and minimize the threats to financial stability.
  • Hedge Fund Registration: Hedge funds and other private funds are now subject to registration, recordkeeping, and disclosure obligations.
  • Executive Compensation: Wall Street Reform helps align business decisions and compensation with the interests of shareholders — increasing disclosure of executive compensation for publicly traded firms, giving shareholders an advisory “say on pay” for senior executives, and requiring that the board compensation committees be independent.

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Overhauled the $600 trillion derivatives market to make it safer and more transparent, including by leading an international push to mandate central clearing of standardized derivatives, setting capital and margin requirements for derivatives that are not centrally cleared, and imposing new oversight of major swap dealers and participants

Transparency: Five Years after the Dodd-Frank Act

The financial crisis demonstrated that financial markets had become unacceptably and dangerously opaque. This lack of transparency allowed risks to build and be transmitted across different sectors of the financial system. As the financial crisis unfolded, not only did federal financial regulators lack adequate tools to address these risks, they had limited knowledge of their size, nature, and interconnectedness. And market participants pulled back further during the depths of the crisis in part as a result of incomplete market information.

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Set new accounting standards to move all exposures onto firms’ balance sheets

The Financial Crisis: Five Years Later

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Required large banks to create “living wills” to help regulators wind down bankrupt firms in an orderly fashion

New rules help make large financial companies simpler to unwind by requiring “living wills” that provide a roadmap for resolving the institution. These reforms force firms to bear the costs of their own risk-taking, instead of the taxpayer.

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Established the Consumer Financial Protection Bureau (CFPB) to hold financial institutions accountable and protect consumers from the types of abuses that preceded the crisis

Since its creation, this new independent watchdog has:

  • Established safer national mortgage standards to better determine a borrower’s ability to repay over the long term.
  • Launched new transparency requirements that clearly spell out interest rates and payments, establish caps on fees and points, and impose training qualifications on lenders.
  • Subjected credit reporting agencies, debt collection agencies, and payday lenders to federal supervision for the first time.
  • Taken enforcement action against companies to crack down on deceptive marketing and unreasonable fees, recovering nearly $12 billion for more than 257 million consumers who had been harmed.
  • Worked with industry to give over half of Americans with credit scores free access to their scores, to help consumers improve their credit health and monitor for identity theft.

Learn More: ConsumerFinance.GOV

Laid the Groundwork for a Manufacturing Resurgence and Fostered U.S. Competitiveness

Launched Manufacturing USA, already up to thirteen manufacturing hubs that bring together industry, academia and government partners to bridge the gap between applied research and product development, leading the way to new advanced manufacturing capabilities

President Barack Obama and Vice President Joe Biden view a 3D-printed carbon fiber Shelby Cobra car during a tour of Techmer PM in Clinton, Tenn., Jan. 9, 2015. (Official White House Photo by Pete Souza)
President Barack Obama and Vice President Joe Biden view a 3D-printed carbon fiber Shelby Cobra car during a tour of Techmer PM in Clinton, Tenn., Jan. 9, 2015. (Official White House Photo by Pete Souza)

Manufacturing USA invests in U.S. leadership in emerging manufacturing technologies critical to our future competitiveness. Each manufacturing hub is designed to build U.S. leadership and regional excellence in critical emerging manufacturing technologies by bridging the gap between early research and product development; bringing together companies, universities, and other academic and training institutions, and federal agencies to co-invest in key technology areas that can encourage investment and production in the United States; and serving as a ‘teaching factory’ for workers, small businesses, and entrepreneurs looking to develop new skills or prototype new products and processes.

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Established a new investment tax credit to support companies building new factories and new jobs to produce advanced, clean-energy products in the United States

Energy Department Announces $150 Million in Tax Credits to Invest in U.S. Clean Energy Manufacturing

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Launched the Investing in Manufacturing Community Partnerships (IMCP) program to pool resources of multiple federal agencies in order to spur communities to develop integrated, long-term economic development plans, improving their ability to attract global manufacturers and their supply chains and create and sustain good jobs

The Investing in Manufacturing Communities Partnership (IMCP) program is an initiative designed to revolutionize the way federal agencies leverage economic development funds. It encourages communities to develop comprehensive economic development strategies that will strengthen their competitive edge for attracting global manufacturer and supply chain investments.

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Formed the Advanced Manufacturing Partnership to convene industry, academia, labor, and government leaders to address the challenge of expanding advanced manufacturing across the United States

FACT SHEET: President Obama Announces New Actions to Further Strengthen U.S. Manufacturing

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Created SelectUSA, the first federal government-wide investment-promotion program, which has directly facilitated billions of dollars in job-creating foreign direct investment and connected thousands of investors with state and local economic development officials

About SelectUSA

Recognizing that the competitiveness and job-generating ability of a nation is determined by its desirability as a place for businesses to operate, SelectUSA was created at the federal level to showcase the United States as the world’s premier business location and to provide easy access to federal-level programs and services related to business investment.

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Launched new infrastructure finance centers at the Department of Transportation, the Environmental Protection Agency, and the Department of the Interior to increase private investment in U.S. infrastructure and encourage more public-private collaboration on transportation, water and other projects

FACT SHEET: Building a 21st Century Infrastructure: Increasing Public and Private Collaboration with the Build America Investment Initiative

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Funded research in next-generation robotics through the National Science Foundation, the National Institutes of Health, NASA, and the Department of Agriculture

President Obama launched the National Robotics Initiative as part of a broader effort to promote a renaissance of American manufacturing through the Advanced Manufacturing Partnership.  Four agencies (the National Science Foundation, the National Institutes of Health, NASA, and the Department of Agriculture) have issued a joint solicitation that will provide research funding for next-generation robotics.

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Signed into law the first long-term surface transportation bill in a decade, with increased investment levels — ending the era of short-term patches

President Obama on a lite rail train

The Fixing America’s Surface Transportation Act (FAST Act), a 5 year, $305 billion surface transportation bill that increases Federal surface transportation investments by 11 percent, an important first step in addressing the significant infrastructure deficit in the U.S. The FAST Act also created the country’s first dedicated freight program and reformed the Federal infrastructure permitting process.

The administration signed into law the first long-term surface transportation bill in a decade. Learn more: wh.gov/the-record/economy

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Helped Small Businesses Get Back on Track and More Entrepreneurs Start New Businesses

Used proceeds from the Troubled Asset Relief Program (TARP) to stabilize banks that lend to small businesses

President Obama Announces New Efforts to Improve Access to Credit for Small Businesses 

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Supported the liquidity of key SBA lending programs

Learn more about the U.S. Small Business Administration

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Signed legislation that expanded SBA lending programs and created new sources of credit for small businesses

Learn more about the U.S. Small Business Administration

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Eliminated borrower and lender fees for SBA loans under $150,000 as part of the crisis response, fueling a spike in the small-dollar loans disproportionately used by minority-owned small businesses

Business Lending Showing New Signs of Strength

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Established two new small business credit programs—the State Small Business Credit Initiative and the Small Business Lending Fund

State Small Business Credit Initiative (SSBCI)

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Small Business Lending Fund

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Cut taxes 18 times for small businesses in the first term and made many of those tax cuts permanent

Tax Relief for Small Businesses

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Created BusinessUSA.gov as a “no wrong door” portal for entrepreneurs and small businesses seeking government information and services

BusinessUSA implements a “no wrong door” approach for small businesses and exporters by using technology to quickly connect businesses to the services and information relevant to them, regardless of where the information is located or which agency’s website, call center, or office they go to for help. Looking forward, the more federal agencies continue to add resources to BusinessUSA to encompass the full range of business programs and services, the more we will be able to reduce the confusing array of websites that exist today.

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Launched the Startup in a Day initiative to make it easier for entrepreneurs to start a business by reducing the amount of time it takes to register and apply for permits and licenses at the local level

FACT SHEET: The White House and Small Business Administration Launch Startup in a Day Initiative and Prize Competition

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Prioritized inclusive entrepreneurship, including hosting the first-ever White House Demo Day

  • FACT SHEET: Celebrating President Obama’s Top 10 Actions to Advance Entrepreneurship, and Announcing New Steps to Build on These Successes
  • FACT SHEET: President Obama Announces New Commitments from Investors, Companies, Universities, and Cities to Advance Inclusive Entrepreneurship at First-Ever White House Demo Day

Raised Academic Standards in Our Schools and Made New Investments From Preschool Through 12th Grade

Expanded access to high-quality preschool for children from low-income families through the Preschool Development Grants, which provided resources to 18 states, and through investments in the Race to the Top–Early Learning Challenge competition.

Since the President’s call to action, 38 states have boosted their investments in preschool. Between 2013 and 2016, increased investments totaled over $1.5 billion and 30 states increased their preschool enrollment from 2009-2014. Read more.

Raised the bar on quality through enactment of bipartisan child care legislation that raised health, safety, and quality standards for federally-subsidized child care. Made significant reforms to Head Start and secured funding to increase number of programs in all 50 states.

Signed the Every Student Succeeds Act (ESSA), which fixes the No Child Left Behind Act and carries forward many of the policies and programs that the Administration has supported since 2009.

ESSA will maintain critical protections for equal educational opportunity and students’ civil rights by:

  • Requiring, for the first time in law, every student be taught to high learning standards in order to prepare them for college and careers.
  • Requiring statewide, annual assessments of all students’ progress towards these standards, providing vital information to educators, families, and communities.
  • Maintaining the expectation that there will be accountability and interventions in schools that are chronically underserving their students or have low graduation rates, and where particular student groups are not making progress.
  • Providing more children access to high-quality preschool.
  • Supporting innovations, including evidence- and place-based innovations developed by local educators and leaders.

Learn More (PDF)

Reached a record high graduation rate of 83 percent. Graduation gaps are closing for students of color, students from low-income families, and students with disabilities and English learners.

U.S. High School Graduation Rate Hits New Record High

Cut the number of so-called “dropout factories” — high schools where no more than 60 percent of students who start as freshmen make it to their senior year — nearly in half since 2008.

Announced a new Testing Action Plan (TAP) to make sure that any tests used in our nation’s classrooms are high quality and worth taking, don’t take up too much classroom time or crowd out teaching and learning, and are used alongside other types of information to paint a fuller picture of how our students and schools are doing.