Charlie Rose Talks to Obama's Chief Economic Adviser Jason Furman
Talk to me about the economic impact you expect to see from Obamacare.
One of the real untold stories in this economy is that in the last three years we’ve had the slowest growth in real per capita health spending in the last 50 years. That’s helping employers add jobs. It’s helping to make health insurance more affordable. There are a lot of reasons why that’s happened, but one is definitely the Affordable Care Act. It’s affecting all Americans in a way they might not understand. You saw a big increase in enrollment in November. People are signing up because this is something they’ve been waiting decades to have, and it’s finally here.
There’s been disappointment over this budget. How do you assess it?
This budget deal is an important step for the economy. For the next year and a half there’s no reason we should have any shutdowns, any of the drama we’ve had. That’s important. The money is also important. We managed to buy back 60 percent of the sequester on the nondefense side. That means we’ll be able to spend more on research, more on education, everything that’s important for long-run growth.
Do you see this as an opportunity to make progress on some of the big issues?
Look, there’s more the president would have liked to have done. He would have liked to have had business tax reform. He would have liked to have had more upfront investments in infrastructure and preschool. He would have liked to have had more medium and long-term deficit reduction. Look at what the Congressional Budget Office estimated. They said [sequestration] took away 750,000 jobs this past year, took six-tenths [of a percentage point] off our growth rate. We’re creating jobs at an increasing rate in the last couple of months, but we’d love to get that rate up, and the sequester was certainly moving us in the wrong direction.
The president recently staked out income inequality as a defining issue. What’s going to restore some balance?
Two trends have made life harder for middle-class families. First, the overall growth rate in the economy slowed after 1973 as our productivity slowed. The second is that income inequality began a steep increase, starting in the late ’70s. Take all that, and you have some very serious challenges over several decades. Now we’re making progress. If you look at the last 12 months, real wages are up nearly 1 percentage point. You’ve seen nominal wages strengthening. You’ve seen inflation remain low. But one year isn’t going to get you out of a problem that was 40 years in the making.
Jobs are on the rise, but aren’t the long-term unemployed in for a shock?
As you know, unemployment insurance—the extension—is set to expire at the end of this year, just after Christmas; 1.3 million Americans would lose their benefits. [In 2014] another 3.6 million would lose them. And this isn’t just potentially devastating for those families. It also hurts our economy. You don’t have their purchasing power.
Is that an item you wanted in the budget, something you weren’t able to get in?
The first order of business that keeps me up at night right now is extending unemployment insurance. It’s so easy. It’s so common sense. Congress has passed it 12 times in the last couple of years. Most of those have been strong bipartisan votes. It borders on a no-brainer, and we should just do it.
Should the minimum wage be raised?
Did you know the minimum wage right now is lower, adjusted for inflation, than it was in 1950? That’s after 63 years of economic growth, 63 years of across-the-board wage growth, and workers making minimum wage haven’t even got an inflation-adjusted wage. That’s something we really ought to change.