The Obama Diary

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Derek Thompson: Thanks, Obama

President Obama has cultivated a reputation for approaching politics with a kind of medical clinicism. But with the full panorama of his presidency coming into view, Obama’s economic legacy is impressive, even historic. First, the centerpiece of Obama’s anti-inequality legacy is the policy that bears his name. Obamacare, a.k.a., the Affordable Care Act, has reduced the uninsured rate from about 16 percent in 2010 to less than 9 percent today, the lowest level in U.S. history. Second, several subtle yet significant tax changes under Obama have made the tax code more progressive. The stimulus bill passed in 2009, a.k.a., the American Recovery and Reinvestment Act of 2009 (or, simply, the Recovery Act), included the most important changes. The law created the Making Work Pay credit, expanded the Earned Income Tax Credit and Child Tax Credit, and created new tax credits, like the American Opportunity Tax Credit for college attendees. The most significant change to the tax code since 2010 has been the eleventh-hour agreement to extend the Bush tax cuts for all families except for an increase in the top tax rate for households making more than $450,000 and an increase in the estate tax rate to 40 percent.

Third, the Obama administration has supported initiatives outside of the tax code and health care policy to help the poor and middle class. They have been advocates for higher minimum wages at the national level, which have arguably buoyed the state-by-state effort to raise minimum wages toward $15 in richer areas. They supported extended unemployment benefits while long-term unemployment was perhaps the country’s most insidious economic plague. Unemployment insurance kept more than 11 million people out of poverty in Obama’s first term, according to Census analysis. The president also expanded Supplemental Nutrition Assistance Program (food stamps) and Temporary Aid to Needy Families (grants that states can use for a variety of measures including helping the poor). His Department of Education spent more than $60 billion to support states’ education budgets and prevent more layoffs of teachers and administrators. In sum, he grew anti-inequality spending more than any president, as a share of GDP. But at a time when both liberals and conservatives have become exquisitely aware of income inequality and its ills, the seemingly placid, cold, philosopher-in-chief did more to combat that inequity than any president in at least 50 years. For that, two words suffice: “Thanks, Obama.”

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