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Obama highlights improved economy but also inequality

In a high-profile speech on the economy, President Obama says there's 'more work to do' and urges an end to political distractions.

July 24, 2013|By Kathleen Hennessey and Christi Parsons
  • President Obama speaks at Knox College in Galesburg, Ill., in an attempt to revive the populist economic message that helped propel him to reelection.
President Obama speaks at Knox College in Galesburg, Ill., in an attempt… (Brendan Smialowski / AFP/Getty…)

GALESBURG, Ill. — President Obama sought Wednesday to steer the nation's attention back to his stewardship of an improving economy with a high-profile speech that took credit for a comeback but warned that persistent "inequality of opportunity" and fights over the federal budget could undo the progress.

Speaking from a college gymnasium in this economically distressed town, Obama issued his sunniest description yet of the economy and praised the resilience of Americans in the face of diminished income, a sluggish job market and a widening gap between rich and poor.

"Today, five years after the start of that Great Recession, America has fought its way back," Obama said. "As a country, we've recovered faster and gone further than most other advanced nations in the world."

Economists agree the United States is gaining ground with steady job growth and increasing investor confidence. But a large share of the new jobs this year have come in lower-paying businesses, and analysts question whether the economy can sustain the rate of growth as the year wears on.

Obama acknowledged "we have more work to do," and for more than an hour he detailed his economic agenda, including proposals for expanding public preschool, raising the minimum wage, overhauling the tax code and curbing the rising cost of higher education.

The speech and another later Wednesday at the University of Central Missouri offered broad, familiar themes, only hinting at specific policy actions to come. Obama promised he would outline details in future remarks. He also vowed to use his executive authority whenever possible to override the Republican opposition that has thwarted much of his economic agenda for more than two years.

"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," Obama said. "This moment does not require short-term thinking. It does not require having the same old stale debates."

The speech was an attempt to revive the populist economic message that helped propel Obama to reelection but has recently faded from view, crowded out by months of unwelcome news on other fronts. Leak investigations, wariness about the economy, a stalled immigration bill and public surliness directed at Washington have blunted the president's postelection momentum.

An NBC News/Wall Street Journal poll released Wednesday put Obama's approval rating at 45%, the lowest since August 2011, when Congress and Obama flirted with a federal default in a showdown over raising the debt ceiling.

A replay of that fight may be on the horizon, and Obama's two-day economy tour, which takes him to Jacksonville, Fla., on Thursday, is in part aimed at positioning the White House for the next go-round. Congress will have to raise the debt limit this fall to allow the nation to pay its bills, and funding will need to be approved to keep the government running after Sept. 30.

Obama called proposals aimed at the middle class his "highest priority." "When the economy is working for middle-class families, it solves an awful lot of other problems," he told students in Warrensburg, Mo.

His remarks were laden with harsh attacks on a "faction" of Republicans in the House, while praising some Republican senators, his most likely first targets for outreach.

House Speaker John A. Boehner (R-Ohio) said Obama should help the economy by approving the Keystone XL pipeline and delaying the 2010 healthcare law. "It's an Easter egg with no candy in it," he said.

Noting that the White House had billed the speech as a major address, Senate Minority Leader Mitch McConnell (R-Ky.) quipped, "With all the buildup, you'd think the president was unveiling the next Bond film or something, but in all likelihood it will be more like a midday rerun of some '70s B-movie," he said.

The White House tried to distinguish the speech from other similar and failed attempts to refocus on the economy by staging it at Knox College, where Obama delivered his first major economic address as a new U.S. senator in 2005. That speech, delivered during relatively good economic times, discussed the plight of workers at a Maytag refrigerator plant in town whose jobs were moved to Mexico. Obama offered an optimistic view of a new economy driven by green technologies, medical research and innovation.

Galesburg has not seen that hope come to life. The town's unemployment rate of nearly 8% masks persistent underemployment and hardships. In the city of 32,000 people, nearly 23% of residents live below the poverty level and nearly 40% of those are younger than 18. Nine years after the last 1,600 people were laid off from the Maytag plant, only 1,000 people in Galesburg work in manufacturing. The main street leading to the private liberal arts school is lined with weather-beaten homes, fast-food restaurants and dollar stores.

On Wednesday, Obama acknowledged the continued struggle of places like Galesburg.

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