NDN Blog

As the country gets ready to pick a new President in 2016, we felt it would be interesting to look at the recent economic performance of the Democratic and Republican parties when they controlled the White House. While there were many ways to cut this data, we chose the last two Presidents of each party and looked at five categories: GDP growth, net job creation, unemployment rate, budget deficits and performance of the Dow Jones.

The contrast between the performance of the economy under recent Democratic and Republican Presidents is stark. Democratic Presidents dramatically outperformed their GOP counterpart in all five categories. Some examples:

Job Creation – Both President Obama and Clinton witnessed an average rate of job growth over 1 million each year. Neither President Bush was able to come close to that number, coming in at 630,000 and 135,000 per year respectively. The two Democratic Presidents oversaw an annual job growth 2.1 million per year. The two Republicans had a combined annual rate of 300,000, or one seventh the total of the two Democrats. The latest data released shows that the economy created 2.9 million jobs in 2014, which is at a comparable job growth rate to an average year in 1990’s.

Unemployment Rate – The two Democratic Presidents saw on average more than a 3 percentage point drop in the unemployment rate during their Presidencies. The two Republicans saw on average more than a 2 percentage point increase. Each Republican President left office with the country in recession.

Deficits – Both Presidents Obama and Clinton witnessed significant declines in the annual budget deficit on their watch. Both President H.W. and W. Bush saw increases of the annual budget deficit on their watch. The second President Bush came to office with a $100 billion annual surplus. He left office with a $1.4 trillion annual deficit, one of the most dramatic turnarounds of America’s finances in any period in US history.

Stock Market - Under the two Democratic presidents, the stock market soared. The Dow Jones has more than doubled in the Obama era and now is at record highs. Under Bill Clinton it grew four fold. Under the first President Bush the market had a small increase. The Dow was lower when the second President Bush left office than when he arrived.

As we look to 2016 it is important to note that the last two Republican Presidents led the nation into recession and larger annual budget deficits. Both Democratic Presidents had to lead the nation out of recession and saw strong job growth, declining deficits and soaring stock markets on their watch. There is indeed a stark contrast between the performances of the two parties on the economy over the past generation. This contrast will be particularly significant in 2016 if the Presidential contest is between Hillary Clinton and Jeb Bush.

Update, April 8: With the 2016 Presidential Race kicking off, we have updated some of the data to reflect current trends in unemployment, job growth, and the stock market. Data about GDP and budget deficits have been kept the same since the initial paper, but will be updated in the future. We hope to keep this data up-to-date as it provides a good foundation of areas to compare the two parties moving forward.

A new poll is out and highlighted in the Miami Herald on how Cuban Americans view the United States efforts to chart a new course on Cuba. 400 Cuban Americans were polled in and English and Spanish on a range of issues, including views on normalizing relations, the continuation of the embargo, and plans to travel to Cuba in the future. The poll finds in part:

• 51% of Cuban Americans show their support for the Obama Administration's new policy to normalize relations. 40% disagreed with it and 9% did not respond or did not know.
• The poll highlights generational differences, with more older Cubans supporting a continued trade embargo, while the majority of those under 50 believe it should not continue.
• Cuban Americans living outside of Florida were much more supportive of President Obama's new policy than those living in the sunshine state.

For on this new data, including reactions by the pollsters and others in this piece from the Miami Herald. Be sure to check out Simon's statement:  "A New Day for the United States and Cuba." 

Fresh off the funding battle over the Department of Homeland Security, GOP Representative Charlie Dent noted to the New York Times: “We really don’t have 218 votes to determine a bathroom break over here on our side. So how are we going to get 218 votes on transportation, or trade, or whatever the issue? We might as well face the political reality of our circumstances and then act accordingly.”

The issue is that there are certain funding that Congress must vote on—and nowhere is that more apparent than with the return of the debt ceiling. On March 16th, according to the Treasury Department, the U.S. reached the limit for the amount of funds it is allowed to spend. As with previous debt ceiling debates, Treasury is able to draw out the period of time before actually defaulting on the national debt through using accounting maneuvers and other extraordinary means. But ultimately, Congress will have to raise the debt ceiling—or risk a default on the debt that will greatly impact the interest rate the US pays on the national debt and harm the full-faith and credit of the United States.

Following the 2014 election, Senate Majority Leader McConnell promised an end to governing-by-crisis. And despite the theatrics around the Department of Homeland Security, there was no shutdown and the Senate handled the dispute with relatively few fireworks. The problem with the debt ceiling is that even approaching it becomes dangerous. In 2011, despite not defaulting on the national debt, consumer confidence dove dramatically as businesses and Americans anticipated disaster. The debt ceiling was first hit in May—and the crisis peaked in August. It would take 6 months to return to neutral ground, and longer to steady growth in confidence.

Since then, Congress has submitted the U.S. economy to additional funding stand-offs: the fiscal cliff on taxes following President Obama’s re-election, a second debt ceiling fight in early 2013, the government shutdown over the ACA in 2014, and the standoff over the Department of Homeland Security. As the Times notes, this spring will bring additional conflict over the expirations of the Highway Trust Fund, the Expert-Import Bank, and the return of the Sequester—alongside the disagreements that are already occurring in Congress between fiscal conservatives and defense hawks in the 2015 FY budget.

Senator McConnell has argued that the process itself will play out over the next couple of months, but what Dent’s quote highlights is the difficulty, particularly in the House to pass any legislation regardless of necessity. Congressional Leaders should return to their previous tactics for using the debt ceiling as a bargaining chip as the risk is way too great. Unfortunately, the last few months have only shown that the contrast between how the Democrats and Republicans run government exists not only in the Presidency in Congress as well—the lack of focus on jobs growth, sound fiscal policy, and governing by crisis all impacts how well Americans perceive the economy as well as the political system.

At a time when Americans are “turning a page” on the U.S. economy, there is no need to return to a dangerous round of governing by crisis.

Later this week, the Supreme Court takes up a new case regarding the Affordable Care Act, King v. Burwell. At risk are subsides that make insurance affordable for many of the Americans who have signed up via the healthcare exchanges. We thought that given how far the law has come, that now would be a good moment to put its progress in perspective. A court decision that rules against the government would have enormous ramifications.

While the Department of Health and Human Services (HHS) has used 11.4 million as the number of beneficiaries of the ACA, we find that the number of Americans benefitting from the ACA is far higher. Steve Ratter’s recent piece in the New York Times cites data from ACAsignups.org, and illustrates that the true number of beneficiaries is over 31 million Americans. And the number may be even higher as neither analysis can fully account for the number of young people who gained insurance coverage by staying on their parents’ healthcare until 26.

If we go with the 31 million number as an estimate, then we have an almost intangible amount of Americans benefiting from the law. How do we put that number in a better context?

Within the first 18 months, the 31 million people benefitting from the ACA are now:

• About 15.1% of the entire American population that falls between the ages of 18 and 65.
• The size of 1/5th of the entire workforce in the United States.
• More than twice as large as the number of members of labor unions in the United States.
• Eight times larger than the entire federal government (including military and civilian personnel).
• 60% of the total Medicare population. There are currently about 50 million people enrolled in Medicare.

Beneficiaries of the ACA are a larger group than labor, the number of employees of the federal government, and other major political groups. This number is likely to grow, as the law has only been fully operating for a year-and-a half. Thus, their needs should not be ignored by Congress or the Supreme Court—particularly when a court case later this week threatens the health insurance benefits of many ACA enrollees. According to a new poll by Hart Research, the American public disapproves of the Supreme Court negatively impacting subsidies by 63% to 29%. Republicans are not far off disapproving of a removal of subsidies by a margin of 56% to 31%.

In the past two years, the number of people uninsured has fallen by about 11 million people. The percentage of the country that is uninsured, according to Gallup, has fallen from about 18% to 12%. These changes have enormous impact, in terms of how Americans will go about taking new risks and what type of impact this freedom will have on their general view towards the U.S. economy. For what it’s worth, the general view on the ACA has reached the point where for the first time more people want to keep or expand the bill as opposed to replace it, according to a poll by Yougov.

Essentially, the ACA has reached the point of no return, and has woven itself into the American healthcare system. It is working as intended, by lowering the number of uninsured, bending the cost curve, and reducing the deficit. What this new data and polls number suggest is the proponents of the law have been underselling the positive and monumental changes that are brought forth when Americans finally feel secure in that an injury or illness will not bankrupt their family. And that the political landscape around the ACA has shifted in the short time since full implementation began.

President Obama hosted a press conference with Chancellor Angela Merkel early today. We were particularly struck with this particular paragraph at the close of his remarks :

"And let me end on an historic note.  This year marks the 70th anniversary of the end of the Second World War.  It marks the 25th anniversary of the reunification of Germany.  So in a time when conflicts around the world sometimes seem intractable, when progress sometimes seems beyond grasp, Germany’s story gives us hope.  We can end wars.  Countries can rebuild.  Adversaries can become allies.  Walls can come down.  Divisions can be healed.  Germany’s story -- and the story of Angela’s life -- remind us that when free people stand united, our interests and our values will ultimately prevail.  And as we look to the future, as I prepare to visit Bavaria in June, I’m grateful for my partnership with Angela, as Americans are grateful for their partnership with the people of Germany."

You can find video of this press conference here (passage referenced is at minute: 7:22), as well as a full transcript.

There is a growing body of public opinion data showing that Americans have indeed “turned a page” on the economy, and feel that things are improving. In many of the main measures cited by experts, the improvement has been significant in recent years, and it is harder and harder to describe the American people as pessimistic about our prospects. This comes at a time of course when income and wages while up slightly still have yet to show meaningful increases. Let’s review some recent data:

Consumer Sentiment: This metric, which I’ve discussed previously, is a five-question measure that asks Americans how they see their current position as well as their perception of the future. Consumer Sentiment rose by almost 20 points in 2014. For context, last year’s improvement was about half the total rise in consumer sentiment during the Obama Administration.

Gallup: A similar positive trend is noted in a new Gallup poll that shows a large change in the group’s perception of whether there is an opportunity for Americans to move ahead if they work hard. Generally, this measure remains high, but rapidly declined during the 2008 recession. In the past year, the margin of those who were satisfied increased from +9 to +22.

Gallup has other measurements, including its own Economic Confidence Index, which rose into positive territory for the first time since they began measuring in 2008. The organization concludes that:

The president's positive spin on the economy is certainly defensible as most economic measures have been trending in a positive direction over the past year, including official government reports of economic growth and unemployment, but also measures that Gallup tracks, including on employment, company hiring and consumer spending.

NBC/WSJ: A recent NBC/WSJ poll highlights similar positive sentiments: 50% of Americans believe that the economy improved a lot or somewhat in 2014; Only 49% feel that the country is declining, which is the lowest since 2007; and those polled who are very/somewhat satisfied with the state of the U.S. economy stands at a seven-year high at 45%.

So how can the American public be feeling so much better about the economy if their wages haven’t gone up? Perhaps it is that for many the economy is far better. Millions of people have gotten jobs in recent years and still have them. At least 15 million Americans – one tenth of the workforce – have gained health insurance through the ACA. 21 states have raised the minimum wage for 2015. 3-4 million people found out late last year that they would be able to get temporary work permits through the President’s immigration actions. Gas/energy prices are dramatically lower for everyone. And for those Americans who own homes or are invested in the stock market, there has been a big uptick in housing prices and the stock market. So as Gallup mentions above, the economy is actually far better for tens of millions of Americans than it was a few years ago and voters are feeling it.

It is also important to note that both the very real improvements in the US economy we’ve seen in recent months, and dramatically improved public sentiment, have come at a time when the President’s health care plan was fully implemented. It not only raises questions once again about the economic literacy of the Republicans, but should cause analysts to start wondering whether tens of millions of people getting health insurance may actually be contributing to the improving public sentiment about the economy. This many people gaining health insurance is a big enough event to alter public opinion all on its own – and more research should be going into this.

This rising optimism is going to change US politics in the next two years. GOP indictments of the Obama Presidency will be far less compelling, and will put more pressure on Republicans to articulate how they will make things better in the coming years. Both parties are going to have to be careful not to sound too pessimistic about where the economy is at—the voters are moving to a different place. This gives Democrats a real opportunity, as we’ve written elsewhere, to draw a very bright line between the economic success of the last two Democratic Presidents and the failure of the last two Republican Presidents.

We will be tracking consumer sentiment closely in the coming months. For the changes we are seeing in the public perception of the economy and of the future of the US are significant, and are in the process of creating a very different political landscape in 2016.

NDN’s Simon Rosenberg contributed to this analysis.

In what has perhaps been their defining argument of the Obama Presidency, the Republican Party predicted that the ACA would bring economic ruin to the United States. More than a year into the ACA implementation we are finding the exact opposite has occurred – while making historic gains in reducing the uninsured, seeing overall health care cost increases slow and federal spending come in under projections, the US economy saw one of its most precipitous drops in the unemployment rate, high GDP growth, and declining annual federal deficits.

Let’s look at some data:

In the past year and a half, the uninsured rate has fallen from 18.0% of the U.S. Adult population to 12.9%. Simultaneously, the unemployment rate has fallen from 7.2% to 5.6% and on average in 2014 the U.S. economy saw over 245,000 jobs added on average each month.

This news is a far cry from the predictions that many in the Republican Party alarmed the public about. From 2010 – 2014, members of the GOP sought to repeal the ACA because it would be a job killer, and devastate the American economy:

• Speaker John Boehner said in 2010: “We need to repeal this jobs-killing government takeover of health care and enact real reforms that will lower health care costs and help small businesses get back to creating jobs."
• Majority Leader Mitch McConnell said in 2012: "We now know that Obamacare has been one of the single biggest drags on job creation since early 2010."
• In 2013, Former Governor Jeb Bush called the ACA “flawed to its core,” and proclaimed, “I don’t think it’ll work.”

Paul Ryan claimed that “Health care spending is driving the explosive growth of our debt. And the president's law is accelerating our country toward bankruptcy.” From the very beginning, the CBO noted that the ACA would lower deficits (and repealing the act would increase them). Recent data from the CBO shows that the ACA’s provisions are 20% cheaper to implement than initially predicted in 2010.

In fact, the ACA is playing a role in bending the overall cost curve according to recent study by the Centers for Medicare & Medicaid Services. The 6.0% growth rate that accompanies the implementation of the ACA is below the historical average.

According to a recent CBS News Poll, 53% of the American public believes that the economy is “good.” This is the highest recorded view of a favorable rating on the U.S. Economy since 2007.

As we head into a Presidential cycle, the issue of how wrong the GOP has been on the ACA has to become a material part of the debate. Opposition to the ACA and the hysterical claims made to its impact on the US has been the defining GOP issue of the Obama Presidency. It is an echo of their opposition to the 1993 Clinton budget, which brought about the longest and one of the most robust periods of growth in recent American history. In each of the last two Democratic Presidencies, the GOP have made big economic arguments that now have to be seen as spectacularly wrong.

Annual Budget Deficit

But this fits into a far broader and more salient reality of the last two and a half decades of American politics. As we reported in a recent study, the GOP also got basic economics wrong when they were in power. Each of the last two GOP Presidencies brought recession, weak stock markets and higher deficits. By contrast, each of the last two Democratic administrations brought growth, lower deficits and soaring stock markets.

The contrast between the modern Democratic Party’s economic performance and literacy versus the bad performance and wrong-headed economic policy of the modern GOP will likely emerge as one of the most important issues of the 2016 campaign.

Update—March 17:

Recent data from the Department of Health and Human Services highlights the greater success of the Affordable Care Act. According to HHS 16.4 million people, who were previously uninsured, gained access to health insurance thanks to the ACA. This corresponds with a drop of about 35% of the entire uninsured population of the United States—a massive change in over eighteen months. The uninsured rate fell even more sharply for Hispanics (12 percentage points) and African Americans (9 percentage points).

We also learned that the issue of people having their plans cancelled is far less of a concern. The Urban Institute released new data this week, which showed that only 400,000 Americans lost their plans on the individual markets due to those plans not meeting new ACA standards. In the total market for 2014, there were only around 900,000 cancelled plans. In fact, health insurance providers offered more new plans to accommodate customers. Moving forward, experts expect cancellations to be less of a factor.

What this continued positive news shows is that the GOP continues to be wrong in their crusade against the Affordable Care Act. More and more people are gaining insurance, while the GOP’s dire predictions have simply not come to pass. Their efforts are now more clearly defined as taking insurance away from at least 16.4 million Americans (and possibly more).

NDN President Simon Rosenberg contributed to this analysis.

Last week, we documented the very real gains the US economy had made under President Obama. This week we look at the progress made in the important renewable energy sector.

At NDN, we’ve long argued that the goal of US energy policy should be to create a cheaper, more distributed and cleaner energy future for our companies and consumers. The President has pursued an “all of the above” energy strategy, which has increased domestic production of oil and gas, seen tremendous advances in renewable deployment, regulated pollution that harms the climate and environment, and improved efficiency to conserve more energy. This strategy has seen significant dividends already as America’s domestic oil and gas production is booming, global energy prices have plummeted, the deployment of renewables in the US has skyrocketed.

Let’s take a deeper dive into renewable energy:

Solar
• Solar installation has surged as prices have plummeted. In fact, annual solar installations have increased by ten-fold since President Obama took office in 2009.
• All the while, the price it costs to install the system has fallen by nearly 63% in the same time frame.

• The Solar Industry has grown from about 93,500 jobs in 2010 to over 174,000 in 2014 – an increase of about 86% overall. It grew at about twenty times greater than the overall economy in the past four years.

Wind
• Prior to the 2008, the Wind Energy Industry was small and was projected to have sluggish growth through 2030. In the late 2000’s, Wind power's deployment accelerated, reaching 50 GW in 2012—about 18 years ahead of the projected schedule. Installations of wind power capacity tripled from 2008 – 2012 almost tripled.
• Today, Wind powers about 18 million homes in the U.S. and is the largest form of renewable energy (besides hydropower) and an emerging industry.

Further Investments in Clean Energy
• The President’s first major bill (the “stimulus package”) included $90 billion to fund clean energy projects, such as battery programs, further research in alternative sources of energy, and tax credits. It also led to a further leveraging of $100 billion in private dollars to invest in clean energy. The program that led to investments in high-profile cases like Solyndra, could eventually result in over $5 billion dollar surplus to the federal government, on-top of creating a strong environment
• In the second term, the President pledged to have 20% of the federal government run off of renewable energy by 2020. The Administration has also made increasing renewable energy a goal under the Environmental Protection Agency’s carbon regulations; renewable energy is one of the options offered under the Climate Action Plan for states to invest in as a way to reach carbon cutting goals. The U.S. Military is out in front, aiming to have 25% of its power come from renewable energy by 2025.

In total, the growth of renewable energy over the past six years is quite impressive. Renewable energy sources now power over 12.9% of electricity production in the United States—an increase of more than 50% since 2008. Solar and Wind are outperforming other types of renewable energy, growing each year by leaps and bounds. Clean energy is no longer a far-off pipedream, but an increasingly vibrant and real piece of the U.S. energy economy.

Sources:
• Solar chart is from a recent article by Jonathan Chait, “History Will Be Very Kind” to President Obama.
• Wind chart is from the 2013 AWEA 4th Quarter Market Report.
• Michael Grunwald of Politico is a great resource for his work on reporting on the clean energy revolution, particularly his book the “New New Deal.”
•* includes hydropower

In 2004, Simon, Joe Garcia, Sergio Bendixen, Maria Cardona and others ran an extensive Spanish language television campaign in Miami challenging the Republicans to stop playing politics with Cuba.   Here are the ads (the English version never aired, just for reference)

"Decades,"  (English). 

"Decades,"  (Spanish).

We are incredibly proud of the work we’ve done for over a decade now to bring a better day for the Cuban people and US relations with the rest of Latin America.   But we are even more proud of our President who took such a bold, historic step forward today.   Thank you Mr. President.

2014 has already been a great year for jobs growth, with the economy picking up steam and each month this year averaging over 200,000 jobs. Perhaps, it wasn’t surprising that we would end the year on a strong note. The Bureau of Labor Statistics reported that the U.S. Economy added over 320,000 new jobs during the month of November, the highest single monthly report since January 2012. In addition, the report revised the data from September and October to include more than 44,000 additional new jobs.

The unemployed rate held steady for November at 5.8%. Over the past year, the unemployment rate decreased by 1.2 percentage points. Additionally, wages ticked up slightly by .4 percent--the most since June 2013. This news, along with strong GDP growth and high consumer sentiment, continues the string of positive recent economic news.