President Obama has discovered the middle class. His awakening to the fact that millions of American families have been excluded from the slowest economic recovery since just after World War II begs only one question: What took him so long?
According to the U.S. Census, median family income has declined on average $2,484 under this administration. In all other recoveries, incomes improved, but not this time.
The employment gains the president touts are real, but most are part-time jobs when many are seeking full-time work. That is why no one celebrates the low unemployment number of 5.6 percent, because all is not well; too many people have given up looking for work. Today, only 62.7 percent of the population is working, which is the lowest level in 40 years. All this occurring while the population continues to age.
So why did the president paint such a rosy picture of the economy in his national address to the nation last week? Politics and legacy: Neither looks good when middle-class incomes have plummeted under his watch. Unfortunately, his policies have contributed to the demise of the middle class, and his solutions compound the problem. Obama’s new plans, which he knows will not be considered by Congress, are examples of his misguided policies, which add to the federal government’s coffers and problems.
These plans include raising $320 billion in new taxes toward financial institutions and all who contribute to them in the form of investments and savings plans. This includes savings plans that many in the middle class use to as tools of financial security. The capital-gains tax would again increase to 28 percent for couples earning $500,000, even though taxes were previously paid on those monies. The inheritance tax, or “death tax” as it is popularly referred to, would be higher than it has ever been for families who are bequeathed property or savings. Penalizing people for dying is awful. Penalizing families for their success is just as bad.
Additionally, there is a new tax proposed for those who have 529 College Savings Plan, which is the only hope many middle-class parents have to help their children afford higher education. How many? The General Accounting Office calculates that nearly one third of families who have these college savings accounts earn less than $100,000.
When the president touts any program, educational or otherwise as “free,” it isn’t: it all comes from the pockets of taxpayers.
On a fundraising stop at Boise State University Wednesday, Obama said, “I know there are Republicans who disagree with my approach. They should put together some alternative proposal.”
He is right. The difference will be in the direction taken. Consider tax reform, for example. Both sides agree that the tax code needs to be simplified, but the president only wants to focus on corporate taxes, while Republicans want comprehensive tax reform that includes individuals and small business. The last is particularly important because entrepreneurs and small businesses owners are the ones who are doing most of the real hiring in this economy.
Just two days after the president’s national address, eBay announced that it was cutting 2,400 jobs, and American Express is letting go of 4,400 employees. If this is a recovery, something is wrong. The fact is that for most people working, they are just barely scraping by.
There was time when American optimism could beat any economic downturn or security need. The American Dream was not in question if you worked hard, educated yourself, saved money and planned for your family’s future. If you needed temporary help from the government, it was there.
A CBS News poll shows that today only 38 percent feel that the country is headed in the right direction.
We should thank President Obama for pitching his message toward the middle class — it is long overdue. But it’s time for a serious discussion about the common good in a context that emphasizes the equality of opportunity rather than the equality of success. That requires leadership from all sides, which must acknowledge the will of voters who, in November, sent the White House a clear message: Work with Republicans and carve out a middle ground. That is where they will find the middle-class family.