President Obama Speaks on the Economy

At the Ford Kansas City Stamping Plant in Liberty, Missouri today, President Obama highlighted the progress we have made since the beginning of the financial crisis five years ago and the work that lies ahead to continue strengthening our economy and deliver a better bargain for the middle class.

The President spoke about how far we’ve come in five years, when President Obama and Democrats bet on American workers, while others said “let Detroit go bankrupt.” In those five years, manufacturing and the the auto industry have come roaring back, adding 7.5 million more jobs.

“Now, some of you remember, five years ago a financial crisis hit Wall Street.  It then turned into a devastating recession on Main Street and it came close to being another Great Depression. By the time I took office, the economy was shrinking at a rate of 8 percent a year — unprecedented.  Our businesses were shedding 800,000 jobs a month.  And you had this perfect storm, and millions of Americans lost their jobs, their homes, their savings they had been working a lifetime to get.

“But what the recession also showed was the fact that for decades, middle-class families had been working harder and harder just to get by, hadn’t seen their incomes go up, hadn’t seen their wages go up.  Manufacturing was moving overseas.  And so what built our middle class had been buckling, had been weakening.

“And I think if you ask most Americans when the economic crisis hit, they might not date it to Lehman Brothers collapsing. They’d talk to you about when they got a pink slip that they didn’t expect, or the bank took away their home, or they didn’t have health insurance, or maybe they were told the plant was shutting down and the assembly line was going quiet.  Those were tough times.

“Five years ago, plants like this one were closing their doors.  And the day I stepped into the Oval Office, the American auto industry — which is the heartbeat of American manufacturing —  — heartbeat of manufacturing — the auto industry was flat-lining. “I refused to let that happen.  So we worked with labor, we worked with management.  Everybody had to make some sacrifices. Everybody put some skin in the game.  We bet on the American worker.  We bet on you.  And today, that bet has paid off because the American auto industry has come roaring back.

“The Big Three are all profitable, hiring new workers.  You’re not just building more cars –– you’re building better cars, better trucks.  Look at what’s going on right here at the plant.  The new F-150 is built tougher than ever, more fuel-efficient than ever.  (Applause.)  You’ve got trouble making them fast enough.  You had to bring on a third shift of 900 workers just to keep up with demand.

And because Ford invested $1.1 billion in this plant, pretty soon, 1,100 more new workers will be joining you on these assembly lines in good, union jobs, building the Ford Transit.  (Applause.)

So more jobs building cars — that means more jobs for suppliers.  It means more jobs for distributors.  It means more jobs for the folks who own the restaurant here in town, or the bar, depending on — (laughter.)  It has an impact on your tax base.  It has an impact on the teacher who teaches your kids, the first responders who keeps you safe.  All those people are impacted by your success.

And that fundamental idea that when everybody is doing — when some of us are doing well, it’s okay, but when everybody has got a stake, that’s when things really start rolling — that’s at the heart of every decision I’ve made as President.  Because when the middle class does better, we all do better.  Shareholders do better.  CEOs do better.  Workers do better.  Everybody does better.  (Applause.)

So in the depths of the crisis, we passed a Recovery Act to make sure that we put a floor below which this country couldn’t fall.  We put money in folks’ pockets with tax breaks.  We made sure that people were rebuilding roads and bridges, keeping things going, helping to keep teachers and firefighters and cops on the job.  Today, three and a half years later, our businesses have added 7.5 million new jobs — 7.5 million new jobs.

We helped responsible homeowners stay in their homes — won one of the biggest settlements in history on behalf of people who had wrongfully lost their homes because banks hadn’t done things right.  Today, our housing market is healing.

“We took on a tax code that was too skewed towards the wealthy.  We gave tax cuts, locked them in for 98 percent of families.  We asked those in the top 2 percent to pay a little bit more.  Today, middle-class tax rates are near their all-time low.  The deficits are falling at the fastest rate since World War II.  That’s what we did.

“We invested in new American technologies to end our addiction to foreign oil.  Today we’re generating more renewable energy than ever before, produce more natural gas than anybody in the world.  We’re about to produce more of our own oil than we buy from overseas for the first time in nearly 20 years” President Obama said.

The President also addressed the health care system, the implementation of the Affordable Care Act, and the situation in Congress which he said is “not meeting the test not meeting the test of helping middle-class families.”

“We took on a broken health care system.  And in less than two weeks, millions of Americans who’ve been locked out of the insurance market are finally going to be able to get quality health care.  Out of every 10 Americans who are currently uninsured, six out of those 10 are going to be able to get covered for less than $100 a month — less than your cell phone bill.

“So we’ve been working, just like you’ve been working, over these last four and a half years.  We’ve cleared away the rubble from the crisis.  We’ve started to lay a new foundation for economic growth, a new foundation for prosperity.  And everybody here, we all had to make some adjustments.  I’m assuming some folks had to tighten their belts, get rid of some debt, focus on things that really matter, cut out some things you didn’t need.

“Which brings me to the current situation.   Let me talk a little bit about what’s going on back in Washington.  Right now, Congress is in the middle of a budget debate.  Now, there’s nothing new about that.  Every year Congress has got to pass a budget, and it’s always a contentious process.  But right now our recovery still needs to build more strength, so it’s important that we get it right in Washington, because even though our success as a country is ultimately going to depend on great businesses like Ford, hard workers like you, government has to do some things.

“Congress has to pass a budget to make sure our education system works, and prepares our kids and our workers for the global economy. If we’re going to rebuild our roads, our bridges, our airports, our ports, government has got to be involved in that.  If we’re going to have scientific research and development — I was looking at all these newfangled pieces of equipment here — some of the things that allowed the efficiencies of this plant originated in laboratories and scientists doing work on the government’s dime.  That’s how we always maintain our cutting-edge.  These are things that help us grow.  These are things that help the private sector succeed.

“So when people tell you somehow government is irrelevant.  No, everything we do has some connection to making sure that we, collectively, as a democracy, are making some smart investments in the future.   That’s how it’s always been. “So what Congress is doing right now is important.  Unfortunately, right now the debate that going on in Congress is not meeting the test of helping middle-class families.  It’s just they’re not focused on you.  They’re focused on politics.  They’re focused on trying to mess with me.  They’re not focused on you.  They’re not focused on you.

“So there are two deadlines coming up that Congress has to meet.  And I want folks to pay attention to this.  Congress has to meet two deadlines, and they’re coming up pretty quick.  “The first deadline:  The most basic constitutional duty Congress has is to pass a budget.  That’s Congress 101.  If they don’t pass a budget by September 30th — what’s the date today?  The 20th.  All right, so if Congress doesn’t pass a budget in 10 days, a week from Monday, the government will shut down.  A government shutdown shuts down many services that the American people rely on.
“This is not abstract.  Hundreds of thousands of Americans will not be allowed to go to work.  Our men and women in uniform, even those deployed overseas, won’t get their paychecks on time. Small businesses, they won’t get their loans processed.

“Now, none of that has to happen, as long as Congress passes a budget.  Number one — passing a budget.

“Number two:  In the next few weeks, Congress must vote to allow the Department of the Treasury to pay America’s bills.  Our Treasury Department, that’s where we take in money and we pay it, right?  Real simple.  This is usually done with a simple, routine vote to raise what’s called the debt ceiling.  If you don’t raise the debt ceiling, America can’t pay its bills.

“Since the 1950s, Congress has always passed it.  Every President has signed it — Democrats, Republicans, Ronald Reagan — (laughter) — Lyndon Johnson — it doesn’t matter.  This is just a routine thing that you’ve got to do so that Treasury can pay the bills.  If Congress doesn’t pass this debt ceiling in the next few weeks, the United States will default on its obligations.  That’s never happened in American history.  Basically, America becomes a deadbeat.

“If the world sees America not paying its bills, then they will not buy debt, Treasury bills from the United States, or if they do, they’ll do it at much higher interest rates.  That means somebody wanting to buy an F-150 will have to pay much higher interest rates eventually, which means you will sell less cars.  That’s just one example of how profoundly destructive this could be.  This is not some abstract thing.

“And this is important:  Raising the debt ceiling is not the same as approving more spending, any more than making your monthly payment adds to the total cost of your truck.  You don’t say, well, I’m not going to pay my bill, my note for my truck because I’m going to save money.  No, you’re not saving money.  You already bought the truck, right?  (Laughter.)  You have to pay the bills.  You’re not saving money.  You might have decided at the front end not to buy the truck, but once you’ve bought the truck you can’t say you’re saving money just by not paying the bills.  Does that make sense?

“So raising the debt ceiling, it doesn’t cost a dime.  It does not add a penny to our deficits.  All it says is you’ve got to pay for what Congress already said we’re spending money on.  If you don’t do it, we could have another financial crisis.

“And the fact is — I know a lot of people are concerned about deficits — our deficits are now coming down so quickly that by the end of this year we will have cut them in more than half since I took office.  Cut deficits in half.

“So I just want to break this down one more time.  I go into a Ford dealership.  I drive off with a new F-150.  Unless I paid cash, I’ve still got to pay for it each month.  I can’t just say, you know, I’m not going to make my car payment this month.  That’s what Congress is threatening to do — just saying, I’m not going to pay the bills.

“There are consequences to that.  The bill collector starts calling you, right?  Your credit goes south, and you’ve got all kinds of problems.  Same is true for a country.

“So if we don’t raise the debt ceiling, we’re dead beats.  “If we fail to increase the debt limit, we would send our economy into a tailspin” — that’s a quote, by the way, what I just said. You know who said it?  The Republican Speaker of the House John Boehner”  President Obama said.

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