Obama Bashes Trump and the GOP

Plus, pay raises for Americans? By Yuval Rosenberg and Michael Rainey Obama: 'Suddenly Deficits Do Not Matter' Former President Barack Obama stepped back into the political fray on Friday, delivering a blistering rebuke of President Trump and the Republican Party while signaling how he plans to campaign on behalf of Democrats ahead of November’s midterm elections, which he called more important than any he could remember. “These are extraordinary times, and they are dangerous times,” he said. Speaking at the University of Illinois Urbana-Champaign, Obama said Trump is “capitalizing on resentments that politicians have been fanning for years” and accused Republicans adopting a politics of fear and anger. “Over the past few decades, the politics of division and resentment and paranoia has unfortunately found a home in the Republican Party,” he said. And he accused Republicans in Congress of abdicating their responsibilities and failing to safeguard democratic institutions in pursuit of an agenda aimed at protecting powerful interests. Obama ended on a more optimistic note. We have been through much darker times than these,” he said, urging his young audience to vote. “In the end,” he said, “the threat to our democracy doesn’t just come from Donald Trump or the current batch of Republicans in Congress or the Koch brothers and their lobbyists or too much compromise from Democrats or Russian hacking. The biggest threat to our democracy is indifference. The biggest threat to our democracy is cynicism.” Here are a couple of key quotes from the speech on the economy and fiscal policy: On the economy: "By the time I left office, household income was near its all-time high, and the uninsured rate had hit an all-time low, and wages were rising and poverty rates were falling. I mention all this just so when you hear how great the economy is doing right now, let's just remember when this recovery started. I’m glad it’s continued, but when you hear about this economic miracle that's been going on, when the job numbers come out, monthly job numbers, and suddenly Republicans are saying it's a miracle, I have to kind of remind them, actually, those job numbers are the same as they were in 2015 and 2016." On tax cuts and the deficit: “With Republicans in control of Congress and the White House, without any checks or balances whatsoever, they’ve provided another $1.5 trillion in tax cuts to people like me, who I promise don’t need it — and don’t even pretend to pay for them. This is supposed to be the party, supposedly, of fiscal conservatism. Suddenly deficits do not matter, even though just two years ago, when the deficit was lower, they said I couldn't afford to help working families or seniors on Medicare because the deficit was an existential crisis. What changed?" On the 2018 Democratic agenda: “Democrats aren’t just running on good old ideas like a higher minimum wage, they’re running on good new ideas like Medicare for all, giving workers seats on corporate boards, reversing the most egregious corporate tax cuts to make sure college students graduate.” Watch Obama’s full speech [here]( get the full transcript [here]( or read more about it [here]( or [here](. [Share this story →]( Number of the Day: 2.9 Percent Average hourly earnings last month rose by 2.9 percent from a year earlier, the Labor Department said Friday — the fastest wage growth since the recession ended in 2009. The economy added 201,000 jobs in August, marking the 95th straight month of gains, while the unemployment rate held steady at 3.9 percent. Analysts noted, though, that the welcome wage gains merely [kept pace]( with a leading measure of inflation, meaning that pay increases are largely or entirely being canceled out by higher prices. “The last time unemployment was this low, during the dot-com boom, wage growth was significantly faster — well above 3.5 percent,” The Washington Post’s Heather Long [wrote](. The White House Council of Economic Advisers this week issued [a report]( arguing that wage gains over the past year have been better than they appear in official statistics. Obamacare Markets Stabilize, Will See Smaller Premium Hikes in 2019 Premiums for Affordable Care Act insurance plans will see relatively modest increases averaging 3.6 percent next year, and some states will actually see rate decreases, according to an analysis released Friday by the consulting firm Avalere and the Associated Press. Every county in the country will have at least one provider, the report said, and 19 states will have either new insurers entering their markets or see existing insurers expand their coverage. Premium increases in the individual marketplaces established by the 2010 health care law averaged 30 percent this year. Why premiums aren’t rising as sharply: Insurers raised rates dramatically last year amid considerable political uncertainty, leaving them less room to raise prices this year, given Obamacare’s requirement that they spend at least 80 percent of premium revenue on paying medical claims. “Insurers are very profitable right now in the individual market following previous increases that overshot what was needed, so they can't justify big increases,” he [tweeted]( along with this chart showing the sharp increase in gross margins for ACA plans over the last two years. Why it matters: The ACA “health insurance marketplaces seem to be stabilizing after two years of sharp premium hikes,” the AP [said](. “And the exodus of insurers from the program has halted, even reversed somewhat, with more consumer choices for 2019.” But even as ACA markets stabilize, cost is still an issue. The average monthly premium for an Obamacare plan is now nearly $600 a month, too high for many middle-class customers who earn too much to receive federal assistance. “This is still a market that’s unaffordable for many people who aren’t eligible for subsidies,” said Avalere’s Chris Sloan. Even so, the relative health of the ACA marketplaces comes as a surprise to some, given President Trump’s efforts to subvert the system. “It's quite remarkable how resilient the ACA has been in the face of efforts by Congress and the Trump administration to undermine it,” Levitt said. “If not for repeal of the individual mandate penalty by Congress and expansion of loosely-regulated short-term plans by the Trump administration, it's quite possible that average ACA premiums would be going down in 2019.” Fact Check of the Week “Trump said that his administration is making Medicare and Social Security stronger. The forecast for both programs is worse today than a year ago. The main Medicare trust fund is expected to run out of money three years sooner. The main Social Security trust fund is expected to run out one year sooner. The Republican tax cut law and lower-than-projected wages accounted for most of the downgrade.” – [PolitiFact’s Jon Greenberg]( after President Trump [said]( this week that "The Democrats want to destroy Medicare. If you look at what they’re doing, they’re going to destroy Medicare. And we will save it. We will keep it going. We’re making it stronger. We’re making Social Security stronger.” Did Soaring Health Care Costs Consume Americans’ Pay Raises? A hard-hitting report released this week from analysts at the insurance firm Willis Towers Watson claims that the health care system is responsible in large part for the lack of income growth experienced by millions of American workers. Sylvester J. Schieber, an independent consultant retired from Willis Towers Watson, and Steven A. Nyce, director of the research and innovation center at the firm, say that their analysis “shows how since the 1980s, the cost growth of employer-provided health benefits has been shrinking workers’ wage growth, eroding their retirement benefits and becoming an increasingly important factor in growing income inequality.” Where the pay raises went: “U.S. employers’ health care costs started small—in 1950, healthcare amounted to only 0.5 percent of total compensation,” the authors write. “But premiums rose 3.1 times faster than total compensation in the 1950s and over twice as fast in the 1960s. Over the next 40 years, health plan costs grew 3.4 times faster than compensation in the 1970s, 2.1 times faster in the 1980s and 1.2 times faster in the 1990s. By the first decade of the new millennium, health care costs were again increasing 3.4 times faster than compensation. This analysis shows that the escalation of employers’ health premiums is now consuming all compensation growth for many workers, leaving nothing to add to their paychecks ...” The authors found that millions of employees paying for employee-provided health insurance saw what in effect were wage losses between 1999 and 2015 due to increases in the cost of coverage. “After paying their premiums, workers in the bottom 60 percent of the earnings distribution with family coverage registered losses in earnings over the 16-year period.” It's hurt some workers more than others: Lower-wage workers have been hit the hardest, since health care costs make up such a significant part of their total compensation. “The costs of employer-sponsored health benefits were sucking the lifeblood out of the potential economic gains for many, if not most, of these workers,” the analysts wrote. The table below from the report shows the net loss in pay experienced by the bottom 60 percent of workers in two-earner couples with employer-sponsored health plans: A pessimistic conclusion: Addressing the report earlier this week, Washington Post columnist Robert J. Samuelson [wrote]( “We’d all like both cheaper health insurance and higher wages, but the way the health-care system is operating today, we might get neither. As insurance premiums get more expensive, inflation-adjusted (‘real’) wages will continue to stagnate or decline.” The complete analysis: See [the full report here](. 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