Three years ago today, a freshly-inaugurated President Obama said of his plan to fix the financial crisis that “if I don’t have this done in three years, then there’s going to be a one-term proposition.”
Republicans are marking the anniversary with an election-year Web video insisting that, by his own measure, Obama has failed. You can view it HERE.
“Obama said he had three years to fix the economy,” the opening headline reads in the one-minute spot from the Republican National Committee. A string of recent statements from White House aides citing a “tough economy” and “very tough economic times” in 2012 follows.
“Twelve million people don’t have jobs, home prices are at an all-time low and there is no end in sight,” RNC chairman Reince Priebus said in a statement.
“By his own standard, it’s obvious that this president has failed to turn the economy around,” he said. “And just like Obama said, it’s time to make this a one-term proposition.”
But while there is no doubt the U.S. economy continues to struggle, an examination of the context of Obama’s 2009 comments to NBC’s Matt Lauer suggests his “proposition” might not have been as sweeping as Republicans make it out to be.
Obama was responding to specific questions about the Troubled Asset Relief Program and whether its economic benefits would merit the costs, then estimated at $700 billion.
“At some point will you say, ‘Wait a minute, we’ve spent this amount of money. We’re not seeing the results. We’ve got to change course dramatically?’” Lauer asked Obama.
“Look, I’m at the start of my administration. One nice thing about the situation I find myself in is that I will be held accountable. You know, I’ve got four years. And, you know, a year from now I think people are going to see that we’re starting to make some progress,” Obama said. “But there’s still going to be some pain out there. If I don’t have this done in three years, then there’s going to be a one-term proposition.”
TARP, which began under President George W. Bush in late 2008, provided infusions of capital to struggling banks, boosted Federal Reserve lending and launched a public-private effort to soften the blow of failed assets weighing on banks’ books.
It is widely credited with averting the collapse of several major U.S. banks and stabilizing the financial sector, while ultimately costing taxpayers significantly less than originally thought.
The lifetime cost of TARP is projected to be $70 billion – one tenth of the amount first allocated by Congress – according to the Government Accountability Office.
The program also included financing for the U.S. auto industry, which has since experienced a resurgence that has led to more jobs and new profitability.
But the outcomes of TARP have not been entirely rosy. Efforts to help struggling homeowners avoid foreclosure, for example, have fallen far short of their goals.
Neil Barofsky, the former special inspector general for TARP, called the Home Affordable Modification Program a “colossal failure” in a March 2011 op-ed.
“As the program flounders, foreclosures continue to mount,” he wrote at the time, “with 8 million to 13 million filings forecast over the program’s lifetime.” The program remains active with $45.6 billion still yet to be paid out.
Meanwhile, the broader debate between Republicans and the administration about whether the economy has “turned around” remains a subjective one, with existing economic indicators to support conclusions on both sides.
There is indeed still plenty of “pain out there” that Obama referred to three years ago, with the national unemployment rate at 8.5 percent in December and 13.1 million out of work.
A new nonpartisan Congressional Budget Office report suggests the unemployment rate could even tick back up above 9 percent by the end of the year, with GDP growth lagging to just 1.1 percent.
And while the home foreclosure crisis, which has swept the nation since 2007, turning out millions of homeowners and depressing prices, has slowed, it is far from over, experts say. Nearly 2 million homes entered foreclosure last year, according to RealtyTrac.
Still, the trend line on job losses verses job creation has gone from negative to positive, charting net private sector job growth for each of the past 22 consecutive months.
The U.S. economy added 200,000 private sector jobs in December, while the unemployment rate of 8.5 percent was the lowest level since March 2009.
All told, the economy added 1.6 million jobs in 2011 after adding 940,000 in 2010, according to the Labor Department. (There’s still a net loss of 1.7 million jobs since Obama took first took office, when things were on the slide.)
As for the foreclosure rate, it was down 34 percent in 2011 from the year before.
Obama told Matt Lauer in 2009 – and has repeated many times since – that “there’s no silver bullets” for the economy and that it’s “going to take some time for us to be able to dig ourselves out of this hole.”
That the pace of recovery needs to quicken is perhaps the only conclusion on which both Republicans and Democrats now agree.