Median Incomes Down During Recovery and Moments to Lead on Debt — Today’s Q’s for O’s WH — 8/30/12

Aug 30, 2012 2:30pm

TAPPER: There was a study published in Bloomberg News, I believe last week, an analysis of census data indicating that American incomes declined more during the expansion that began in June 2009, the three years — they went down — the median household income went down 4.8 percent.

That’s worse than happened during the actual 18-month recession, which was going down 2.6 percent. I was wondering if the White House had seen that study, had a brief — and had a response to it, an explanation as to why they thought that might have happened.

CARNEY: Well, Jake, as you know and as I just mentioned, the problems that the middle class has been encountering have predated the recession. During that previous expansion that you noted, under President George W. Bush, the middle class saw its income stagnate or decline, and that was during an economic expansion prior to a cataclysmic recession that had a devastating impact on the country’s economy and the middle class.

And there is no question that we have been, as a country, pulling ourselves out of a(n) extremely deep hole that was dug by that recession, and we have much more work to do.

TAPPER: Well, why did median household incomes go down more after the expansion began than during the actual recession?

CARNEY: Well, again, I think that the fact of the matter is that when you look at a recession that included periods of economic decline on the — the likes of which we saw in the fourth quarter of 2008, a shrinkage of 9 percent; when we saw more than 8 million jobs lost during that recession, that the — and we had — we saw a situation where some forecasters were predicting depression levels of unemployment and banks failing and a global — potentially a global depression, that those circumstances required dramatic action, which the president took, and they have required consistent action, as we pull ourselves out of that hole and continue to move forward.

I mean, that — I think that the study you’re citing is testimony to the depth of the recession that we encountered and, you know, the fact that it’s going to continue to take significant efforts to move ourselves forward. And one thing, when it — when you talk about the middle class and jobs and incomes, this president has had on the table since last September a proposal that would, by the estimates of outside economists, put a million Americans back to work — teachers and firefighters and other first responders. Because of their refusal to accept the basic premise that millionaires and billionaires who did extremely well during that previous expansion should pay a little bit extra, Republicans have not approved that legislation that would put teachers and firefighters and police officers back to work.

The president’s going to keep fighting for that. He’s going to keep fighting for measures that would put construction workers back on the job rebuilding our roads and highways and schools because that’s good — because it creates jobs now, it’s good for those people and those families, but it’s also about rebuilding the foundation of our economy so that we’re strong moving forward in the 21st century.

TAPPER: The president’s taking a real beating at the Republican convention, specifically on the issue of leadership when it comes to making tough choices. We heard that from Paul Ryan, we heard that from Governor Christie.

I was wondering specifically when it came to two moments of his presidency that if Mr. Obama, President Obama had any regrets? One was when the Simpson-Bowles commission issued its report and President Obama did not embrace it. I know you’ve been asked this before, but I’m wondering if the president — if that was a difficult decision for the president to not — to not embrace that?

And then the second was when he and Speaker Boehner were working on the so-called grand bargain, and ultimately, because of a group of senators that put forward plans that had more revenue than what President Obama had agreed to, the president, in the words of Speaker Boehner, moved the goalposts, changed what he wanted.

He wanted more than $800 billion in revenue; he now wanted, I think, 1.2 trillion (dollars). I wonder if President Obama, looking back on it — at how difficult it is to get anything done when it comes to debt reduction in this town in a bipartisan manner — if he regrets the second and the first Simpson-Bowles, if that was a difficult decision.

CARNEY: Well, let me start by sort of positing that presidents generally don’t get to make decisions that are not difficult. And I would happily talk about a series of very tough decisions the president made that have proven to be very helpful to the American economy and to our national security.

On the Bowles-Simpson commission: As you know, President Obama’s budget reflects the principles of Bowles-Simpson, the shared sacrifice that is needed to stabilize our debt as a share of the economy. It also — and this is an important point, because a lot of people talk about Bowles-Simpson but don’t really know what’s in it; I know you do, but a lot of people throw it around, including legislators who should know better.

The president’s budget proposals actually include — I mean, Bowles-Simpson, rather, includes even less — or the president, sorry. The president’s budget proposal includes even less domestic spending, which is what Republicans tend to go after — less domestic spending than Simpson Bowles — and even more savings from health care entitlements, Medicare and Medicaid, than Simpson-Bowles in the first decade.

There are two reasons why the president — or there are two things about Simpson-Bowles that the president did not support, or the differences he had with them.

First, the tax increases in Simpson-Bowles are significantly larger than the ones the president has called for — not usually catnip to Republicans. And the defense cuts in Simpson-Bowles are significantly deeper than the ones the president believes are wise as a matter of national security — again, hardly, you would think, appealing to Republicans.

Another, I think, useful point to make, especially since it did come up last night at the Republican convention, is that Mitt Romney’s running mate was on the Simpson-Bowles commission. He voted against the Simpson-Bowles report. He also was part of the — played a role in the debt ceiling negotiations and, based on reporting from your colleagues, did not support reaching a compromise with the president.

As you know, Jake, the president worked very closely with Republicans in the Senate and the House and believed that it was very important to try to reach a grand bargain. And he was willing to make compromises to get there. It is a myth to put forward the idea that Republicans in the House, who have basically uniformly said no to revenue of any kind, were willing to support a grand bargain that included revenue. During the period that you’re talking about, the president made clear that $800 billion in revenue as part of a grand bargain was still possible, and there was no response from Speaker Boehner or anyone else in the House Republican leadership to that proposition.

We know that Republican would-be presidents stood on stage and, to a person, refused to endorse the proposition that to get our fiscal house in order they would accept even one dollar in increased revenue for millionaires and billionaires for every $10 in spending cuts. You know, the president’s put forward a plan that’s balanced and responsible to reduce our deficit by over $4 trillion. In include — it included and includes $2.50 in cuts for every $1 in revenue. It includes domestic spending that is lower than anything we’ve seen in 50 years in this country — nondefense discretionary spending. He has already signed into law $2 trillion in cuts, as you know.

And he will work going forward for that balanced plan that is so essential that every bipartisan group says — not just Bowles-Simpson but Rivlin-Domenici, the Gang of Six — everyone who’s looked at this says that it is not plausible, either economically or politically, to do this any other way than through a balanced approach that asks everyone to pay their fair share, that asks everyone to play by the same set of rules, that doesn’t do what the Republican plan does which is say to seniors, in order to pay for extending Bush-era tax cuts to the wealthy and giving them additional tax cuts we’re going to turn Medicare into a voucher program that sticks seniors with an added $6,400 a year in costs.

That’s unnecessary. It’s wrong. And it’s only part of that proposal because of the insistence the millionaires and billionaires not only should retain tax cuts but should get more.

TAPPER: So it wasn’t a difficult decision and he has no regrets –

CARNEY: I think all of this stuff — all of this is difficult. Every one of these issues is challenging. But I think the fact is, the only person in these negotiations who has put forward a balanced plan that is — mirrors the proposal put forward by the Bowles-Simpson commission is the president of the United States. And he’s continued to push for that. And –

TAPPER: And Speaker Boehner, though you don’t believe that he would have been able to get it passed.

CARNEY: I think reporting by you and your colleagues shows demonstrably that that is the case. And look, the president believed very much that it was worth the effort to engage in those negotiations. He believed that — and believes today — that achieving a balanced deficit reduction plan that strengthens the economy and asks millionaires and billionaires and oil companies and others to do their fair share while reducing spending for over 4 trillion is the right thing to do. It’s — and it requires compromise on both sides, and we have not seen compromise — I mean, I — what I — I’m certainly not hearing out of the convention in Tampa anybody calling for a balanced approach to deficit reduction. Have you guys heard that? Did anybody say, you know what; we endorse the idea that revenue ought to be part of a balanced plan that will — addresses our fiscal challenges? Because if anybody said that, I missed it.

SHOWS:
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus