In November 2008, the nation was facing its worst economic crisis since the Great Depression. The housing bubble had burst, the economy was hemorrhaging 700,000 jobs a month, and “too big to fail” banks were on the verge of collapse.
Severe economic pain was widespread—more than 10 million people were unemployed, up from 7 million before the crisis. No one was hit harder than communities of color, where residents who should have qualified for prime loans had been targeted and steered toward higher-priced exotic subprimes, then lost their homes to foreclosure. As reporter Jamelle Bouie put it, the loss of wealth represented “a generation’s worth of hard work and progress wiped out.”
This was the economy our nation’s first African-American president inherited.
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Barack Obama’s work to respond to hardship and deprivation began before he even took the oath of office, when he ordered his transition team to develop what would become the American Recovery and Reinvestment Act (Recovery Act). He signed the bill into law in February 2009.
The Recovery Act was one of the most powerful pieces of antipoverty legislation passed in decades. It extended tax credits to more people who worked in low-paying jobs—a reform that eventually became permanent, and helped lift nearly 10 million people out of poverty last year alone. It prevented more than a million home foreclosures, saved or created up to 3.6 million jobs, and helped families and communities survive the economic havoc that had been unleashed by a reckless Wall Street.
Princeton economist Alan Blinder and Moody’s Chief Economist Mark Zandi estimate that without the Recovery Act we might have faced a depression, with 17 million lost jobs (instead of about 8 million), and a peak unemployment rate high of nearly 16 percent (instead of 10 percent). The Recovery Act’s expansion of the safety net also kept more than 6 million Americans out of poverty.
Immediately following passage of the Recovery Act, the President began work on healthcare reform, eventually signing the Affordable Care Act (Obamacare) into law in March 2010. The legislation established historic economic protections. Gone is the ability of insurance companies to reject people for coverage on the basis of pre-existing conditions. Gone was the chance that Americans would be too poor to afford insurance, but not poor enough to qualify for Medicaid (until the Supreme Court got involved). And gone is the chance that young adults would be cut off from their parents’ plans.
More than 22 million Americans have gotten health insurance through Obamacare, and the share of Americans without health insurance has dropped to a record low. The law also protects millions of low- and moderate-income families who would otherwise be a single health crisis away from poverty. Vice President Joe Biden described the significance of the legislation perfectly when he said, “This is a big f—ing deal.”
Once the Affordable Care Act was in place, Obama began working with Congress to tackle some of the root causes of the Great Recession—including the actions of “too big to fail” financial institutions. The Dodd-Frank financial reform law established the Consumer Financial Protection Bureau (CFPB) to protect consumers from unfair, deceptive, or abusive practices, and to take action against companies that break the law.
Throughout his term, President Obama worked tirelessly to make sure Americans have a fair chance at success. He launched the Promise Neighborhood and Promise Zones initiatives to improve economic opportunity in high-poverty communities—whether urban, rural, or tribal. He signed the Lilly Ledbetter Fair Pay Act, which makes it easier for women to file an equal pay lawsuit. He issued Executive Orders to raise wages for federal government contractors, updated a meek Overtime Rule in order to raise working-class wages, took executive action to help ensure that people aren’t held back by a criminal record, and created the Deferred Action for Childhood Arrivals (DACA) program to protect undocumented children and young adults from deportation.
The president also drew attention to issues that have been neglected for far too long, ranging from criminal justice reform, longstanding federal policy failures on American Indian and Alaskan Native issues, and science-based nutrition standards for school meals. And he accomplished all of this while most Republicans in Congress refused to cooperate on virtually any of his proposals—a tactic stated explicitly by Senator Mitch McConnell, among others.
To be sure, the legacy is not all positive and the work is not complete. The economic recovery following the Great Recession was extraordinarily slow and painful for far too many of us—and many people haven’t recovered at all. He could have prevented more foreclosures by forcing banks to modify mortgages. DACA and the Overtime rule were blocked by the courts, food and nutrition assistance programs were cut nearly as quickly as they were expanded, and revenues were never increased sufficiently to meet the nation’s long-term antipoverty and infrastructure needs.
That said, President Obama’s legacy is one that demonstrates a tireless commitment to making the American Dream accessible to all Americans.
As we now approach the swearing-in of President-elect Donald Trump, just about everything we have alluded to here, and much more, is in jeopardy.
That’s why in the coming weeks, TalkPoverty’s series examining Obama’s legacy will focus not only on poverty and inequality, but on what’s at risk under a Trump administration. It will address how we can protect—and eventually expand—the gains we have made over the past eight years.
No one will be more vulnerable to the changes proposed by Trump and his Republican allies than people who are already struggling. We need to be ready to fight as if lives are at stake—because they are.
Editor’s note: TalkPoverty presents this series in collaboration with the Georgetown Center on Poverty and Inequality.