Obama Sets Marker on Economy for Trump With Defense of PoliciesBy
Report from Council of Economic Advisers says economy strong
Work unfinished on raising working class wages, report says
President Barack Obama laid down a marker for his successor, declaring Thursday that the U.S. remains the world’s strongest economy and warning that attempts by Donald Trump to undo major initiatives would mean the erosion of the nation’s economic foundation.
In his final annual economic report to Congress, Obama and his Council of Economic Advisers paint a rosy picture of the economy under Obama, noting the longest streak of job growth on record. Yet along with a rebound for wage growth and home prices since the depths of the recession, also acknowledged that “much work remains” to be done to deal with income inequality, productivity and the slowing growth of the working-age population.
“Over the past eight years, our country has come back from a once-in-a-lifetime economic crisis and emerged even stronger,” Obama wrote in the introduction to the report.
Trump won the presidency on a campaign that promised to stop U.S. companies from moving jobs to other countries, get tougher with trading partners, and cut taxes and regulations to spur greater economic growth than the nation experienced under Obama. His slogan, “Make America Great Again,” was an appeal to working-class Americans most affected by the decline of manufacturing jobs. Trump has said he would replace Obamacare and roll back the package of financial industry regulations known as Dodd-Frank that were passed following the financial crisis.
The president and his advisers set up the report as an implicit baseline for the incoming Trump administration, peppering the document with warnings that to retreat from Obama priorities like health care, immigration, financial industry regulation and efforts to combat climate change would mean the erosion of the nation’s economic foundation.
“It is no secret that our openness to new ideas and inclusivity are part of what make the United States the most resilient economy in the world,” Obama wrote. “Continuing our technological progress and innovation, engaging with the world economy through trade, and welcoming immigrants and new American families will create shared growth and help define our economy for the coming decades.”
The document was released as attention shifts from Obama to the incoming Trump administration and the president-elect’s efforts to persuade U.S. business leaders to keep jobs inside the country. White House spokeswoman Jennifer Friedman said the report “can and should be used as a benchmark” for Trump and it shows that Obama’s approach was working.
IBM Chief Executive Officer Ginni Rometty said ahead of a meeting Wednesday with Trump that she plans to hire about 25,000 people in the U.S. and invest $1 billion over the next four years. That followed a deal brokered by Trump to prevent Carrier, a unit of United Technologies Corp., from moving about 800 jobs from Indianapolis to Mexico in exchange for state tax incentives.
But the White House has said Trump’s success stories so far, such as the Carrier deal, pale in comparison to the robust job growth since Obama took office amid the worst economic contraction since the Great Depression.
White House spokesman Josh Earnest said last month that "Trump would have to make 804 more announcements just like that to equal the standard of jobs in the manufacturing sector that were created in this country under President Obama’s watch."
The report argues that under Obama, the U.S. has made progress across a broad range of macroeconomic measures. Wage growth is accelerating, real median household income grew at the fastest pace on record in the last year, and the U.S. saw its largest one-year drop in the poverty rate, the White House said.
But amid the list of accomplishments, Obama’s economic team also outlined some of the persistent challenges facing the nation.
Productivity growth has slowed in the U.S., and that has been a drag on the economy. Similarly, the country has seen the fastest growth in inequality of any major advanced country. And the dip in the labor force participation rate extends beyond the aging baby boomer population.
The advisers also warn that climate change or an attack on the president’s health care law -- two areas where Trump has promised a decisive break from Obama -- could hurt future prosperity.