Obama: Income gap a ‘fundamental threat’

President Obama declared rising income inequality a “fundamental threat” to the United States on Wednesday.

Speaking in one of the poorest neighborhoods in Washington, D.C., Obama pledged that for the remainder of his presidency, his administration would “focus all our efforts” on addressing an issue that threatens the economy and the American Dream.

The hour-long speech had all the trappings of a serious policy address, presenting a legislative agenda for the remaining three years of the Obama administration.

But Democratic strategists, liberal economists, and political scientists questioned whether it marked a real shift in focus.

ADVERTISEMENT
Obama has long decried the growing gap between the rich and poor, and has previously touted many policies that could tackle the issue — including universal pre-K, raising the minimum wage, infrastructure growth, and extending unemployment insurance.

Equality served as the predominant theme of the president’s second inaugural address, following a campaign in which the president cast his opponent as the embodiment of the broken economic system.

But with a few exceptions, the president’s economic priorities have taken a back seat to foreign policy crises, administrative controversies and battles with Congress over government funding. 

That’s fed into existing frustration with the liberal wing of the Democratic Party, which has watched Obama preside over a period of soaring stock prices and corporate earnings and stagnant wages and employment.

Dean Baker, co-founder of the left-leaning Center for Economic and Policy Research, said he’s inclined to see Wednesday’s remarks as the “latest in the one-off speeches” that Obama gives periodically. 

“It’s not as if we can identify policies that he’s been out there stumping for — that there were three things the president really wants to do, but [Speaker] John Boehner [(R-Ohio)] won’t let him have them,” he said.

But despite his skepticism, Baker said there was reason to be encouraged. He and other liberal activists applauded Obama’s embrace of the minimum wage ahead of an expected Senate vote to raise pay to more than $10 per hour.

Lawrence Mishel, the president of the Economic Policy Institute, said he was also pleased to see Obama insist on the need for broad-based wage growth — something absent from his summertime economic push.

Mishel said he remains doubtful that even with the Senate vote, any meaningful economic legislation will move before the next election. But he said if Obama is serious about refocusing his second term on income inequality, he can find ways to show that it’s a priority.

“How about having dinner with some minimum wage workers? How about marching with the fast food workers?” Mishel said. “He can do more.”

Jacob Hacker, a Yale University professor who recently published a book on the effect of income inequality on American politics, said he’ll be watching to see how Obama uses executive action and the nomination process — which has become simpler after Senate Democrats changed the filibuster’s rules — to pursue his stated agenda.

“There are going to be some things he can do to carry this agenda forward on his own, especially now that he may actually be able to nominate people to the executive branch and judiciary,” he said.

Hacker said the address was also an opportunity for the president to rally his base before the midterm elections.  

“It may be the chance to invigorate support among Democrats who have been dismayed by the rollout of the Affordable Care Act,” he said.

Democratic strategist Tad Devine agreed, noting that the speech comes at a time where “people all across the country are feeling squeezed.”

Protests by low-wage workers at fast food chains and big box retailers have grabbed headlines during the holiday shopping season. Within the past month, both New Jersey and the District of Columbia have moved to raise their minimum wages.

New York mayor-elect Bill de Blasio won his race decisively after focusing his platform on the separation between the haves and have-nots within the city. And last week, Pope Francis denounced “an economy of exclusion and inequality.”

Devine said by hammering this economic message, the president can invigorate minority and low-income voters who vote less frequently in midterm elections, but represented a sizable part of his base during the 2008 and 2012 elections.

“This, more than any issue, is going to energize voters who in the past have not participated in the midterm elections,” Devine said. “It would be a mistake if he doesn›t continue to talk about this issue on a sustained basis.”

Obama himself admitted Wednesday that the “elephant in the room” was the inability to deliver on his goals because of partisan differences.

“I realize we are not going to resolve all of our political debates over the best ways to reduce inequality and increase upward mobility this year or next year or in the next five years,” he said.

Sure enough, Republicans were quick to point out that Obama was railing against disparities that had only grown during his five years in office.

“Perhaps even more stunning is that while the president is acknowledging the failure of his economic policies, his tonic is just more of the same,” said Brendan Buck, a spokesman for Boehner.

But Obama signaled that he would more aggressively challenge Republicans to “offer their own” ideas to address inequality.

“You owe it to the American people to tell us what you are for, not just what you›re against,” Obama said. “It›s not just enough anymore to say get the government out of the way and let the unfettered market take care of it.”

More in Economy & Budget

Republicans don't really care about inequality

Read more »