CHARLOTTE, N.C. – In August 2008, Democratic presidential nominee Barack Obama stood before an adoring crowd of 84,000 supporters in Invesco Field in Denver and promised to unite the country and tackle its economic woes.
“Tonight, more Americans are out of work and more are working harder for less,” the Illinois senator told the convention crowd. “More of you have lost your homes and even more are watching your home values plummet. More of you have cars you can’t afford to drive, credit card bills you can’t afford to pay, and tuition that’s beyond your reach. These challenges are not all of government’s making. But the failure to respond is a direct result of broken politics in Washington and the failed policies of George W. Bush.”
Nearly four years after one of the worst economic crises in U.S. history, Obama is under siege by the GOP for a faltering economy and a nagging concern among many in both parties that the country is not moving in the right direction. Obama will arrive in Charlotte, N.C., this week to accept his party’s nomination for a second term and bask in the praise of his Party’s most prominent figures while trying to convince an electorate that the country is on the right path when a majority of voters say it isn’t.
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Locked in an extremely close contest with Republican nominee Mitt Romney, Obama must deliver a compelling argument for why he deserves a second term to counter relentless charges last week at the GOP’s Tampa convention that the president’s economic policies have failed and it’s time for a new direction.
Not since Democratic President Jimmy Carter ran for a second term in 1980 or Republican President George H.W. Bush ran for reelection in 1988 has a sitting president faced as many problems as Obama does in seeking a second term. Carter survived a challenge from Sen. Edward M. Kennedy of Massachusetts and the liberal wing of his party, but lost to Republican Ronald Reagan in a landslide that fall. Bush was attacked by his party’s right wing for breaking his “no new taxes” pledge and lost to Clinton in the general election.
Now Mitt Romney has challenged Obama to explain how Americans are any better off today than they were four years ago – the same question Ronald Reagan posed in a critical debate with Carter.
And indeed, with few exceptions, the economic picture remains grim: The unemployment rate has been above a dangerously high 8 percent for 42 consecutive months; median household income is down roughly 5 percent from where it was when the Great Recession officially ended in the summer of 2009; economic growth last year was an anemic 1.8 percent, substantially below what the administration originally projected; and the government has added $5 trillion to the national debt since Obama took office.
Equally troubling, nearly a third of U.S. homeowners have mortgages that are “under water,” exceeding the value of their property, while median household net worth declined a stunning 35 percent between 2005 and 2010, from $101,844 to only $66,740, according to the Census Bureau.
“No matter how you slice and dice the numbers, people have really taken a hit and they know it,” said William A. Galston, a government expert with the Brookings Institution and a former policy advisor to President Bill Clinton. “The Obama administration can make a good case that things have slowly gotten better on their watch. I guess the question is whether the people focus more on ‘the better’ or on ‘the slowly.’”
In an appearance on CBS' "Face the Nation" Sunday morning, Maryland’s Democratic Gov. Martin O’Malley conceded that the country is not better off economically than it was four years ago. “Can you honestly say that people are better off today than they were four years ago?” Bob Schieffer, the host of the show, asked the governor.
“No, but that’s not the question of this election,” O’Malley replied. “The question, without a doubt, we are not as well off as we were before George Bush brought us the Bush job losses, the Bush recession, the Bush deficits, the series of desert wars — charged for the first time to credit cards, the national credit cards.”
Obama and his strategists argue that while the economy and unemployment are still troubling, things would have been much worse if the president hadn’t moved aggressively to bail out Wall Street and the auto industry, pump more than $800 billion of stimulus projects and tax breaks into the economy, push through the Dodd-Frank financial reforms to protect consumers, and promote assistance to ease the housing crisis and blunt the impact of joblessness on millions of Americans.
While Republicans have dismissed the 2009 American Recovery and Reinvestment Act as a failure, the consensus among economists is that the stimulus spending helped stave off deeper job losses and supported a modest recovery. Nonetheless, 12.8 million Americans are unemployed today and many more have given up looking for work.
“We aren’t where we need to be. Everybody agrees with that,” Obama recently told the Associated Press. “But Gov. Romney’s policies would make things worse for middle-class families.”
OBAMA’S CHOICE: ATTACK OR INSPIRE
In contrast to his earlier “yes we can” rhetoric, a graying and far more defensive Obama will likely detail the successes of his administration. At the same time, he’ll hammer away at the tax cut and budget policies advanced by Romney and his running mate, Rep. Paul Ryan of Wisconsin, that Democrats say will further line the pockets of the rich at the expense of the poor and the middle class.
Obama will argue that a victory by Romney and Ryan would turn back the clock and produce a reprise of failed Bush era policies that led to a financial crisis, massive deficit spending and sustained unemployment in the first place, while placing in jeopardy Medicare and other entitlement programs. “Despite all the challenges we face in this new century, what they offered over those three days [in Tampa] was an agenda that was better suited to the last century,” Obama said during an appearance over the weekend at the University of Colorado.
Obama has called Romney’s budget and tax cut proposals “Robin Hood in reverse,” adding, “They have tried to sell us this trickle-down, tax cut fairy dust before. And guess what? It does not work. It didn’t work then; it won’t work now. It’s not a plan to create jobs. It’s not a plan to reduce our deficit. And it is not a plan to move our economy forward.”
Galston agrees that Obama has a strong argument to make: His policies, put in place when the economy was losing over half a million jobs a month with stock market prices just half of where they’d been before the housing bubble burst, prevented the nation from plunging into a second great depression. On his watch, unemployment is down two percentage points from its peak; medium household income has finally begun to recover; and even the long-depressed housing market is showing signs of stabilization and improvement.
To counter arguments that he’s hostile to business, Obama can point to the 4 ½ million new jobs created since February 2010 and argue that if it weren’t for the more than half a million jobs eliminated through cuts in public employment, the unemployment rate would be well below 8 percent.
“He can make a case that we are moving in the right direction, even if it’s so slow that most people haven’t yet factored that movement into their assessment,” Galston said.
Unlike Carter and George H.W. Bush, Obama does not face an intra-party revolt. The party’s liberal wing may be disappointed over issues that include the size of the stimulus and environmental policy. But those groups are lining up solidly behind him for his re-election bid because of the sharp cuts in social programs promised by Mitt Romney.
POLLS: THE PRESIDENCY IS UP FOR GRABS
That solidarity could be found in the streets of Charlotte over the weekend. In a small but spirited demonstration that marched past the Convention Center here Sunday, 800 protesters carried signs attacking the administration for keeping troops in Afghanistan, the use of drones against terrorists overseas, and fracking for natural gas in America’s rural areas. Yet most in the crowd said they planned to vote for Obama.
“We get a lot of our reimbursement from Medicaid and there is a big risk to us if reform is repealed,” said Jason Werth, a 28-year-old physician’s assistant at a clinic in nearby Carrboro, N.C. “I see largely Mexican immigrants and their children.”
Obama and Romney are locked in a virtual tie among registered voters heading into this week’s convention. Polls suggest that Americans find the president far more likeable than Romney and feel he has a better understanding of the financial plight of average voters.
Romney, the former Massachusetts governor and Bain Capital co-founder, is seen as better equipped to handle the economy. However, despite making Obama’s mishandling of the economy and Obama’s alleged disdain for the private sector a centerpiece of the convention in Tampa last week, Romney received a minimal bounce at best, according to the latest Gallup Poll. About the same number of people said they were more likely (40 percent) or less likely (38 percent) to vote for the Republican standard-bearer after watching or reading about the GOP convention.
Still, 72 percent of voters say the president’s handling of the economy will be a “major factor” in their vote in November, according to a recent Washington Post-ABC Poll. More than 63 percent of Americans think the country is on the wrong track in an average of five top polls, according to Real Clear Politics.
Obama enjoys some advantages, though, including substantially greater appeal among women and young voters. He also leads Romney in a handful of key battleground states, such as Florida and Ohio, although those races appear to be tightening.
The Obama campaign has been working hard to rebuild the ground operation that helped carry him to victory in places like North Carolina and Virginia, both of which are now leaning Republican. The campaign’s ability to fill Bank of America stadium on Thursday night for the president’s acceptance speech will be an early test of their success.
“I think on the whole the level of disaffection among Democrats is more easily repaired than the level of disaffection on the Republican side,” said Ross Baker, a political professor at Rutgers University. “The feeling among Republican conservatives is that here is a guy who they strongly suspect is sailing under false colors. They’re not comfortable with him. They feel that that [if] elected, he will revert to his previously moderate ways. With Obama, I think there is a sense that this is a guy who understands he governs a very divided nation. He can’t be a full-throated liberal. He’s got to give ground. The danger is demobilization rather than defection by the Democrats.”
Merrill Goozner reported from Charlotte while Eric Pianin reported from Washington.