Dems grasp for election lifeline

Dems grasp for election lifeline
© Greg Nash

Hillary ClintonHillary Diane Rodham ClintonDemocratic convention lineup to include Ocasio-Cortez, Clinton, Warren: reports Trump brushes off view that Russia denigrating Biden: 'Nobody's been tougher on Russia than I have' Kanye West 'not denying' his campaign seeks to damage Biden MORE and Democrats have a new opening to tout the party’s record on the economy as they seek to regain their footing for the fall campaign.

A new report out Tuesday from the Census Bureau showed that incomes grew in 2015 for the first time since 2007, rebutting one of the biggest criticisms of the economic recovery under President Obama — namely, that pay has remained stagnant.

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The census numbers astonished economists and gave a boost to Democrats, who face the difficult task of convincing voters that they should hold on to the White House for a third term.

“This provides a predicate for candidates, especially Democrats, who want to build on the foundation of current policies,” said William Galston, a senior fellow at the Brookings Institution who was an adviser to President Bill ClintonWilliam (Bill) Jefferson ClintonGiuliani says Black Lives Matter is 'domestic terrorist' group We have the resources to get through this crisis, only stupidity is holding us back Biden needs to bring religious Americans into the Democratic fold MORE.

The release of the data couldn’t have come at a better time for Democrats, who increasingly see polls favoring the GOP. Republican presidential nominee Donald TrumpDonald John TrumpJoe Arpaio loses bid for his old position as sheriff Trump brushes off view that Russia denigrating Biden: 'Nobody's been tougher on Russia than I have' Trump tees up executive orders on economy but won't sign yet MORE has cut significantly into Clinton’s lead in presidential polls and has overtaken her in a handful of battleground states. And several Senate races that Democrats had hoped to win appear to be drifting out of reach.

But Democrats risk overreaching if they portray the economy as thriving.

Trump’s broader warning about a nation in decline has resonated deeply with voters, and polls show Americans remain dissatisfied with the overall state of the economy, particularly in places that have suffered heavy job losses.

Economists had long attributed that economic malaise to income gains being concentrated among the wealthiest — but they are now starting to rethink that analysis.

The census report found that median household income climbed 5.2 percent last year, the biggest single-year gain since the government began tracking the data in 1962.

What’s more, the wage gains were spread across all income levels, indicating that the middle class may finally be enjoying economic benefits that had previously only gone to the wealthy. Median household income grew among the poorest and the rich as the bottom 10 percent of earners saw their wages jump 7.9 percent in 2015 while the 95th percentile saw income grow 3.7 percent.

“You can’t get more unambiguous than this. You can’t have a better single year for incomes in the middle and the bottom than this,” said Arloc Sherman, a senior fellow for the left-leaning Center on Budget and Policy Priorities. “We are, at last, moving fast in the right direction.”

The economic gains already appear to be reaping benefits for Obama, who is enjoying some of his highest approval ratings since he was reelected in 2012. A Washington Post-ABC News poll out Monday put his approval rating at an eye-popping 58 percent, adding wind to Clinton’s sails.

But while Tuesday’s report was undeniably good news for the U.S. economy, the political picture remains complicated.

For one, while the latest report found that wages were broadly climbing across the income spectrum, the median paycheck is still lower than it was before the housing bubble burst in 2008. Only those earning the most are actually ahead of where they were before the financial crisis. The income gains recorded in 2015 were actually the first recorded in the country since 2007, so for most Americans, the recovery is just getting underway.

“It does feel like we’ve turned a corner. We saw declines for so long, and to see this big increase, it’s indicative of more positive things to come,” said Elise Gould, a senior economist at the left-leaning Economic Policy Institute. “But families are still struggling to make ends meet. I think that’s just a fact.”

Polling data bears that out. Gallup’s Economic Confidence Index shows most Americans still have a negative view of the U.S. economy.

“I may still be just as unhappy as I was before they put this out,” said Douglas Holtz-Eakin, head of the conservative American Action Forum. “If Hillary Clinton starts running around and saying ‘it’s all good,’ that’s a dangerous place to be.”

While the data could help Democrats be more full-throated in their support for Obama’s economic policies, they are likely to portray it as a work in progress rather than as an accomplished mission.

Clinton has regularly tried to strike this balance. In her speech accepting the Democratic presidential nomination in July, she bemoaned stagnant wages and economic inequality, even as she touted an economy that is “so much stronger” under Obama.

“Too many people haven’t had a pay raise since the crash,” she said. “There’s too much inequality, too little social mobility.”

And her campaign has been cautious about taking a victory lap on the economy. The Clinton campaign did not put out a statement heralding the census report, although it did make note of it on Twitter.

The White House was less measured, eager to bolster the president’s economic legacy.

“I usually try to be restrained, but this is unambiguously the best Income, Poverty & Health Insurance report ever,” tweeted Jason FurmanJason FurmanIn surprise, unemployment rate falls, economy adds jobs Overnight Health Care: Global coronavirus cases top 1M | Cities across country in danger of becoming new hotspots | Trump to recommend certain Americans wear masks | Record 6.6M file jobless claims The Memo: Scale of economic crisis sends shudders through nation MORE, chairman of Obama’s Council of Economic Advisers.

Some allies of Democrats want the party to keep emphasizing the room for improvement in the economy even as they talk about what can be done to build on the gains seen in the census report.

“Don’t declare victory and go home. There are problems in our labor market and our economy that are very deep and intractable,” said Damon Silvers, director of policy and special counsel at the AFL-CIO, the nation’s largest labor federation.

“We are looking for the candidates that we support to make that clear on the campaign trail and not to suggest that they’re treading water.”