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FACT CHECK: Obama Claims Credit for an Incomplete Recovery


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The U.S. may not have “risen from recession” quite as rousingly as President Barack Obama suggested in his State of the Union speech Tuesday night. Seven years after that severe downturn began, household income hasn’t recovered and healthy job growth is complicated by the poor quality, and pay, of many of those jobs.

It’s always problematic when a president takes credit for an improving economy, just as it is when he’s blamed for things going bad. A leader can only do so much, for better or worse, and there are two sides to every economy. But after an election in which Obama largely held off on chest-beating, he claimed credit in bold terms for what is going right.

A look at some of his claims, and the facts and the political climate behind them, in his speech:

OBAMA:

—”At this moment – with a growing economy, shrinking deficits, bustling industry and booming energy production – we have risen from recession freer to write our own future than any other nation on Earth.”

—”Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis.”

THE FACTS: By many measures, the economy is still recovering from the deep scars left by the Great Recession.

Job growth has been healthy, but fueled in part by lower-paying jobs in areas such as retail and restaurants, which have replaced many higher-paying positions in manufacturing and construction. Part-time jobs also remain elevated: There are still 1.7 million fewer workers with full-time jobs than when the recession began in December 2007.

And the faster hiring hasn’t pushed up wages much. They have been growing at a tepid pace of about 2 percent a year since the recession ended 5 1/2 years ago. That’s barely ahead of inflation and below the annual pace of about 3.5 percent to 4 percent that is typical of a fully healthy economy.

That has left the income of the typical household below its pre-recession level. Inflation-adjusted median household income reached $53,880 in November 2014, according to an analysis of government data by Sentier Research. That is about 4 percent higher than when it bottomed out in 2011. But it is still 4.5 percent lower than the $56,447 median income in December 2007, the month the recession began.

Booming energy production is indeed a reality, but that’s a phenomenon many years in the making, with the development of cost-effective extraction from fracking and other means playing into the rise of the U.S. as an energy production giant.

The U.S. unemployment rate, at 5.6 percent in December, is actually higher than when the recession began, although down from its peak of 10 percent in 2009.

Obama, by referring to the jobless rate of the “financial crisis,” probably meant the blowup that followed the collapse of Lehman Brothers in September 2008. At that time, the rate was 6.1 percent. That’s a bit selective, since the economy had officially been in recession for nine months at that time.

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OBAMA: “I am sending this Congress a bold new plan to lower the cost of community college — to zero.”

THE FACTS: Zero for qualifying students; an estimated $60 billion over 10 years to the treasury.

Obama confronts a Republican-controlled Congress that can be expected to be wary of a new program costing that much. Moreover, the proposal requires states to contribute about a quarter of the money, and getting them to go along is bound to be tough. Many states refused to expand Medicaid under the health care law, for example, even though Washington is picking up the entire cost in the first years.

On the other hand, community college is an issue close to home for state government, perhaps more appealing than partnering with Washington on the health law, so the idea could have a fighting chance if it can get through Congress. Educators are divided on its merits, with some worrying that aid for a community college education could divert students and scholarships away from four-year schools.

(AP)



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