The United States Senate Committee on Finance

For Immediate Release

October 08, 2014
Contact:
Aaron Fobes/Julia Lawless (202) 224-4515
Fact Sheet: Obama Economy Boosts Wall Street, Not Main Street
Middle-Class Americans Continue to Struggle Under Presidents Misguided Economic Policies
Since the President took office in January 2009, middle-class Americans have been saddled with
slow economic growth, weak job markets, and smaller paychecks.
Following is an analysis, prepared by the Senate Finance Committee Minority Staff, on the Obama
economy:
WEAK JOB MARKETS:
When President Obama came into office, the national unemployment rate was 7.8 percent and
rose to as high as 10 percent in October 2009. Today it is 5.9 percent, however:
The number of people who are not in the labor force has grown, despite a growing
working-age population, by 12.1 million.
The number of people who are not in the labor force who want a job has grown by more
than 640,000 during the Obama Administration. Many simply gave up on trying to find a job
in the Obama economy.
The employment-to-population ratio has remained consistently below 60 percent during
Obamas tenure and has barely budged and has been at 59.0 percent since June of 2014; in
contrast, the ratio averaged 62.9 percent between the beginning of the year 2000 through when
Obama assumed office.
The labor force participation rate has continued to trend downward during Obamas
tenure, from 65.7 percent when he took office to its current low of 62.7 percent.
Payroll job growth has been tepid over Obamas tenure: it has averaged only 135,000 per
month since the end of the recession.
While over 7.4 million payroll jobs were lost during the recession, there has only been a
net 4.7 million jobs created over Obamas tenure.
SMALLER PAYCHECKS:
Middle-class Americans take home pay has shrunk under the Obama Administrations economic
agenda:
Earnings have barely budged during President Obamas tenure. Average hourly earnings,
adjusted for inflation, were $10.38 when the president took office; nearly six years later and a full
five years and two months after the National Bureau of Economic Research declared that the
recession ended (June 2009), average hourly earnings are now (August, 2014) down to $10.34.
Inflation-adjusted median household income has fallen during President Obamas
tenurefrom $54,423 in 2008, the year before the president took office, to only $51,939 in 2013
(the last year of data availability), putting a squeeze on middle-class American families.
Inflation-adjusted per capita income has fallen from $29,173 in 2008 to $28,829 in 2013.
The number of people in poverty has risen over President Obamas tenure. As a percent of the
total population, 13.2 percent of Americans were in poverty in 2008, before the President took
office. In 2013, 14.5 percent of Americans were in poverty.
SLUGGISH ECONOMIC GROWTH:
The tax-and-spend agenda of the Obama Administration has led to record high debt and anemic
economic growth:
Annualized growth in the inflation-adjusted gross domestic product (GDP) has
averaged a meager 1.7 percent over President Obamas tenure (and averaged a tepid
2.2 percent since the end of the recession), in contrast to the long-run (1948 Q1-2014
Q2) average of 3.3 percent.
The Obama-era deficits have been as high as 10.2 percent of the size of the entire
economydeficit levels not seen since the years surrounding World War II.The federal
budget deficit ballooned to $1.47 trillion in fiscal year (FY) 2009, fueled by the failed $800 billion-
plus stimulus law that ended up costing American taxpayers close to $1 trillion, without any
meaningful return to Americans in terms of improved economic outcomes.
Despite claims that budget austerity and the slashing of spending were the drivers of deficit
reduction, the deficit reduction that has occurred since the outsized deficit in 2009 is
entirely accounted for by higher federal revenues; not by spending reductions.
Since the high-water mark of deficits in FY 2009, deficits have fallen. In August of FY 2014
the fiscal-year-to-date deficit was $590 billion, a $670 billion decline in the deficit of $1,260
deficit at the same time in FY 2010. Yet the deficit reduction was more than accounted for
by higher federal revenueup $747 billion for the fiscal-year-to-date in 2014 through August
relative to the same period in 2010. Despite continuous claims of budget austerity and
spending cuts, federal outlays were also upby $76 billion for the fiscal year-to-date in
2014 through August relative to the same period in 2010.
For the fiscal-year-to-date in August of 2014 relative to the same period in 2010, increased
federal receipts more than account for (111 percent) of the deficit reduction of $670 billion
that occurred; increased federal outlays account added nothing and, in fact, detracted from
deficit reduction.
Gross federal debt outstanding has risen by an unprecedented $7.2 trillion since
President Obama took office, and currently stands at $17.9 trillion, which is over 111
percent of the size of the entire United States economy.
WALL STREET GAINS; MAIN STREET LOSES:
The low interest rate environment engineered by the Federal Reserve and the Obama
administration were designed partly to boost stock markets, rewarding Wall Street while punishing
savers on Main Street and nest eggs of retired Americans:
Stock have soared, rewarding Wall Streetbetween the time President Obama took office
and September of this year: the NASDAQ stock index is up by more than 198 percent; the
Standard & Poors 500 composite is up by more than 127 percent; and the Dow is up by 99
percent.
Rates on Main Street savings accounts have plummeted to near-zerofor example, the
average deposit rate on a 12-month, $10,000 minimum Certificate of Deposit has fallen more
than 90 percent, from an average of 2.1 percent in December of 2008 to 0.2 percent in
September of 2014, which is not even enough to keep up with inflation.
Social Security Trust Funds have also received lower returnsthe average interest rates
paid by the U.S. Treasury to the Social Security Trust Funds on special-interest Treasury
securities held by the funds has fallen by more than 36 percent during President Obamas tenure
in office: The rate was: 3.635 percent in 2008, prior to President Obama taking office, but has
fallen: to 2.917 percent in 2009; 2.760 percent in 2010; 2.417 percent in 2011; 1.458 percent in
2012; 1.875 percent in 2013; and 2.313 percent in 2014 through October.
Big Banks Have Gotten Bigger total assets of the 10 largest banks in the U.S. have grown
since President Obama took office, to more than $11 trillion, more than the $9.5 trillion of assets
held by American households and nonprofit organizations as of the second quarter of this year.
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Senate Committee on Finance | 219 Dirksen Senate Office Building | Washington, DC 20510-6200