The latest economic report from the White House is part victory lap, part pitch for enacting what President Barack Obama calls his "middle-class" agenda — including new trade deals with Europe and Asia and the president's budget.
At a briefing for reporters Wednesday, ahead of Thursday’s release of the Economic Report of the President, chief economic adviser Jason Furman ticked off the statistics that have buoyed White House spirits of late — improving economic growth, the best job performance since 1999 last year and lower gas prices.
But there are several troubling caveats, Furman acknowledged.
The percentage of men in prime working age who have dropped out of the labor force has grown substantially in recent decades and is higher than many competitors. More troubling, the income of middle-class families has been largely flat, although there are recent signs of modest improvement. Median family incomes remain stuck at mid-1990s levels.
"This is the big picture challenge that we’re trying to overcome as an economy," Furman said.
Furman said much of the lag in wage growth, which he attributed to decades-long trends, came from slower productivity growth, and somewhat less important was growing income inequality.
Furman said a bright spot is in export industries, which have seen higher wage growth, and made the pitch for new trade deals that would lower trade barriers.
Adviser Maurice Obstfeld said growing trade, particularly in services, has the potential to bolster middle-class incomes. And he noted the trade deals under development would phase-in in an effort to cushion the adjustments to U.S. industries and workers.
The average U.S. tariff was 1.4 percent on imports, while most of the governments the United States is negotiating with have far higher barriers, he said.
There’s also the China card. Per the White House pitch, China doesn’t insist on the same standards as the United States in its deals, and if the United States doesn’t engage these countries, China will be setting the agenda.
"What we would like to do is ... level up the playing field rather than leave it to others to level down the playing field," Obstfeld said.
Of course, the administration still has work to do to convince members of the president’s own party of the merits of new free trade deals; many Democrats say earlier trade deals should take some of the blame for stagnant wages and lost jobs.
Furman also pointed to the an end to budget crises as a reason for 2014's economic performance. He said government spending cuts ceased to be a net drag on the economy, helping to boost growth. And he said Obama’s success in ending the sequester and increasing spending $70 billion in his budget would boost economic growth by some multiple of 0.5 percent of gross domestic product, provided Congress goes along.
The administration also is touting the drop in gas prices — taking credit for increasing energy efficiency and pushing for moving toward a low-carbon economy.
"It's in general a vindication of an energy strategy that is trying to reduce the amount we use," Furman said. He said oil consumption is 4.6 million barrels per day less than had been projected eight years ago, and domestic production is 3.3 million barrels per day higher.
Some other points emphasized by Furman: There has been no increase in part-time jobs in the past several years — all of the growth has been in full-time employment.
Adviser Betsey Stevenson also pointed to the administration's push for paid family and sick leave, noting that conflicts between work and family life have been increasing along with two-parent-worker homes.
At the briefing, one questioner got under Furman’s skin. Neil Munro of The Daily Caller questioned Furman about the administration allowing millions of immigrants to get work permits and the impact on the labor markets.
Furman said the president's executive actions would add to the economy, and cut off Munro as he protested.
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