Highly trained physical science teachers needed to educate students for high-tech economy

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In an increasingly high-tech economy, we cannot continue to handicap students and neglect the workforce needs of our nation. And that is why it is high time the nation addresses the severe shortage of physical science teachers. Far too often, the teacher in a physics or chemistry classroom has neither the content knowledge nor the focused pedagogical education necessary to effectively teach the subject. Only 47 percent of physics and 46 percent of chemistry classrooms are taught by teachers with a degree in the subject. Physics and chemistry top the list of hardest teaching positions to fill year after year.

As a result, students go to college underprepared for demanding courses and unmotivated to pursue STEM (science, technology, engineering, and mathematics) courses of study. The situation is unfortunate because STEM disciplines hold great employment opportunities: Overall there are 3.6 unemployed people for every job posting, but in STEM fields, for every unemployed person there are 1.9 job postings. Shortages of STEM workers are particularly acute in the physical sciences where 1 in 4 workers are foreign born.
 
It is shocking that, despite repeated calls for action stretching over more than 100 years, the situation has improved very little, if at all. Things may soon change. President Obama’s Fiscal Year 2014 budget, released April 10, contains the beginning of a national strategy to address teacher shortages in STEM.
 
The nation needs a coordinated strategy to ensure that all teachers in the physical sciences are well prepared, not just a small fraction. The Task Force on Teacher Education in Physics (T-TEP), which recently completed a four-year study, found that “the national landscape of professional preparation of physics teachers shows a system that is largely inefficient, mostly incoherent, and completely unprepared to deal with the current and future needs of the nation’s students.”
 
The good news is we know what works. T-TEP identified several exemplary programs that could serve as models for a more systematic national effort. For instance, Rutgers University runs one of the most active physics and physical science teacher preparation programs in the nation; the program supplies a large number of highly effective teachers to northern New Jersey. School districts express a high degree of satisfaction with these graduates, who receive rigorous preparation, including five courses on physics pedagogy closely integrated with teaching experiences. A national strategy is needed to expand these and similar successes, so they become the norm rather than the exception.
 
Mr. Obama’s budget contains $265 million in new initiatives for K-12 STEM education, including STEM Innovation Networks that partner school districts with universities and other entities to improve STEM instruction. It is encouraging that this plan is aligned with the central recommendation of the T-TEP report, which is to establish a network of university-based regional centers for educating teachers in physics. However, some critical improvements are needed if STEM Innovation Networks are to become the basis for a successful national program to address the nation’s need for effective teachers in the physical sciences.
 
One thing we must take into consideration is that not all STEM fields have the same needs. Programs with the label “STEM” tend to neglect physics, partly due to the relatively small numbers of teachers compared to biology. Yet the need is arguably greater. In contrast to the severe shortage of teachers in physics and chemistry, teacher shortages in biology are much less common and a high percentage of biology teachers (73 percent) have a degree in the subject. Teacher shortages in the physical sciences will not be resolved without a concentrated effort specifically in these disciplines. The UTeach program, which has a goal of graduating more STEM teachers, has had great success in math and biology but little impact on physics. By comparison, the Physics Teacher Education Coalition (PhysTEC), which concentrates specifically on physics teachers, has shown dramatic increases in program graduates.
 
In addition, it is critical to prioritize the education of new teachers. Most of the federal funds are directed toward professional development for practicing teachers, and while professional development is important, this approach is unlikely to solve the shortage of effective teachers in the long run. Practicing teachers who are underprepared to teach physics typically do not have the extensive time required to develop content knowledge and pedagogical skill at a deep enough level. A more robust solution must give top priority to building high quality programs for educating new teachers, so they supply effective teachers in sufficient numbers to meet the national need.
 
We must make sure our students are ready to compete in a high-tech economy, and that means making sure that every physics and chemistry classroom has a well prepared teacher. With a president who strongly supports STEM education, we have an important opportunity to transform teacher education through establishing regional centers and solving these longstanding teacher shortages.  But without getting the details right, we risk continuing the long-established trend of mediocrity.
 
Vokos is professor of Physics at Seattle Pacific University and is chairman of the Task Force on Teacher Education in Physics (T-TEP).

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Obama, female senators focus on economy, budget

President Obama hosted the 20 female U.S. senators for halibut, peach pie and a two-hour discussion of the economy and the federal budget Tuesday at the White House.

"The president enjoyed continuing his discussion with the senators about a wide range of items on the agenda, including working together to find common ground on budget issues and new initiatives to grow our economy, create jobs and strengthen the middle class," a White House official said.

Topics of conversation also included the bipartisan immigration bill under review in the Senate, last week's failed gun control vote and expanding education programs.

"The president also reiterated his commitment to ensuring all resources remain available as a part of the ongoing investigation into the explosions in Boston last week and commended law enforcement efforts," the White House official said.

Tuesday's meeting was the latest in a series of gatherings held by the informal female caucus. The event was originally organized by Sen. Barbara Mikulski (D-Md.) and Sen. Kirsten Gillibrand (D-N.Y.), who  suggested to President Obama that one of their dinners should be held at the White House.

“When I saw President Obama a few weeks ago, I told him about our quarterly dinners and, I said ‘Mr. President, if you want to see bipartisanship in Washington, invite the women senators to help you get it done.’ And he loved the idea and he plans to invite us to the White House,” Gillibrand told ABC News in January.

After the dinner, Gillibrand said there was "a great discussion" over the meal in a post to Twitter.

The dinners are usually hosted at the senators' homes, and Sen. Lisa Murkowsi (R-Alaska) was scheduled to originally host Tuesday's meeting. According to The Washington Post, the Alaska lawmaker had already ordered halibut from her home state, and offered to have the fish delivered to the White House.

That entree was served along with peach pie, according to a White House official.

The dinners are traditionally off-the-record, and none of the female senators spoke with press upon entering or exiting the White House.

The 20 female senators represent a high-water mark in the upper chamber, besting the record of 17 females in the previous Congress.

Tuesday night's meeting is the latest in a series of outreach efforts by President Obama in recent months, as the White House seeks to improve relations with Capitol Hill. Last week, Obama and a dozen Senate Democrats dined together at the Jefferson Hotel, four blocks from the White House. The president has hosted a pair of similar meetings — one at the hotel, the other at the White House — for Republican lawmakers.

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Suicides, Disease: Europe's Sick Economy Costs Lives

Europe's financial crisis is costing lives, with suicides and infectious diseases on the rise, yet politicians are not addressing the problem, health experts said on Wednesday.

Deep budget cuts and growing unemployment are tipping more people into depression, and falling incomes mean fewer people can see their doctors or afford to buy medicines.

The result has been a reversal since 2007 of a long-term decline in suicide rates, coupled with worrying outbreaks of diseases including HIV - and even malaria - in Greece, according to an major analysis of European health in The Lancet journal.

Countering these threats requires strong social protection schemes, researchers argue. But the austerity measures imposed after a string of crises in southern Europe - most recently in Cyprus - has shredded such safety nets.

"There is a clear problem of denial of the health effects of the crisis, even though they are very apparent," said lead researcher Martin McKee of the European Observatory on Health Systems and Policies, a group backed by the World Health Organisation.

"The European Commission has a treaty obligation to look at the health effect of all of its policies but has not produced any impact assessment on the health effects of the austerity measures imposed by the troika."

The so-called troika of the European Commission, European Central Bank and International Monetary Fund is the group of lenders responsible for a series of economic bail-outs.

McKee said the failure of European governments and the European Commission to face up to the health consequences of their policies was reminiscent of the "obfuscation" of the tobacco industry over curbs on smoking.

The case of Iceland, however, suggests there is an alternative.

Despite a devastating financial crisis, Iceland rejected austerity, following a referendum, and instead continued to invest in its social welfare system. As a result, the researchers found there had been no discernible effects on health since the crisis.

Iceland's economy has now returned to growth, but the recovery is patchy and inflation has remained stubbornly high.

By contrast, McKee and colleagues reported that healthcare systems were now under strain in many European countries, including Spain, Portugal and Greece, with a series of negative consequences.

In particular, there is a growing trend for patients to seek care at a later stage, even though this will mean worse outcomes for individuals and higher costs for the healthcare system in the long term.

In Greece, meanwhile, hospitals are struggling to maintain basic standards, resulting in a rise in antibiotic resistant infections, and patients have suffered shortages of a number of medicines, including epilepsy treatments.

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Economists Disagree With Paul Ryan’s Claim That ‘Debt Is Crushing Our Economy’

Over the past three years, House Budget Committee Chairman Paul Ryan (R-WI) has repeatedly introduced budget resolutions that contain draconian spending cuts in an effort to stave off the debt crisis he says is right around the corner if it isn’t addressed immediately. Ryan’s plans, all three of which have passed the House of Representatives, would almost surely add to the debt instead of decreasing it, but his main view is that America’s current level of debt is weighing down the economy, a claim he repeated to Fox News’ Greta Van Susteren Thursday night.

“The debt is crushing our economy, it’s slowing us down, and it’s guaranteeing the next generation has a diminished future,” Ryan said. “And we believe we have a moral obligation to balance this budget to get a healthier economy and create jobs.”

The source of those claims is a paper by Carmen Reinhart and Kenneth Rogoff that shows that economies grow more slowly when their debt-to-GDP ratios are in excess of 90 percent. But as Bloomberg reports, there is no economic consensus around those findings, especially when it comes to large economies like the United States:

“The argument that heavy debt loads slow economic growth doesn’t hold a lot of water,” says Guy LeBas, chief fixed- income strategist at Janney Montgomery Scott LLC in Philadelphia who oversees $12 billion. “It suffers from a mix-up of cause and effect: When weak economic conditions arise, it tends to encourage deficit spending, which is what has led to more U.S. debt being issued, and not the other way around.” [...]

“The Rogoff-Reinhart 90 percent is really quite a fragile number,” says Joseph Gagnon, a former economist in the Fed’s monetary affairs division. “There is no threshold like that for countries that have control of the currency they borrow in.”

Moreover, there is no evidence that the debt is threatening the United States in the short-term. Borrowing costs are at historic lows — as Bloomberg notes, the cost of paying off the debt is lower today than it was when Ronald Reagan was president and financial markets are “begging” the U.S. to borrow. Instead, there is plenty of evidence that the focus on debt and deficit reduction has slowed the economic recovery. Government spending has plateaued since the 2009 stimulus effort that kickstarted the recovery, so while government spending traditionally pulls the economy out of recessions, spending cuts hampered efforts to boost the economy this time.

Investments to help the economic recovery now would fuel growth that reduces deficits and, thus, improve America’s long-term debt outlook as well. The current crisis facing the U.S. isn’t a debt crisis, but rather an unemployment crisis that is being exacerbated by lawmakers who focus too much on the debt.

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California To Other 49 States: Can You Match Our Clean Energy Economy?

While the prospects of comprehensive energy legislation remain grim in Washington, real action to address climate change and grow the clean economy is being taken on the state level.

California in particular is a shining example of state-based leadership on climate, having established its own cap-and-trade mechanism — a key element in the Global Warming Solutions Act of 2006 (also known as AB 32) — that will soon be linked with the Province of Québec which will decrease overall greenhouse gas emissions and provide greater flexibility to California businesses. The state also has a Renewable Portfolio Standard of 33 percent by 2020 (the state utilities have already met 20 percent of its electricity needs through renewables), and a net metering program allowing customers to receive financial credit for power generating by their onsite system.

Thanks to the foresight of California policymakers and ample natural resources, the state leads the nation in solar projects, solar megawatts installed, and the average cost per watt of solar. In 2011, $1.9 billion was invested in the state to install solar on homes and businesses, and there are currently more than 1,500 solar companies working throughout the manufacturing chain in California. California even ranks second in wind installation, while also leading the nation in most wind capacity installed in 2011.

Clearly, Californians have much to be proud of when it comes to taking strong action to reduce carbon emissions and fighting the urgent threat of climate change.

This week, Southern California energy providers came to DC to highlight the state’s great achievements and recommend action that could be taken at the federal level needed to maintain long term energy reliability for California while at an event hosted by the Los Angeles Area Chamber of Commerce. The panelists called for three specific items of legislation that federal lawmakers can enact to not only support California policies, but create economic and environmental benefits for the entire country:

1. National Clean Energy Standard

In his 2011 State of the Union address, President Barack Obama proposed a federal “clean energy standard,” which would require utility companies to produce 80 percent of their electricity from no- or low-carbon sources by 2035. The Center for American Progress has recommended that an 80 percent clean energy standard should also include a requirement that 35 percent of electricity generation come from renewable sources and efficiency measures. This standard should be met by requiring a national target of 25 percent renewable electricity generation alongside a requirement that utilities reduce demand to save energy by 10 percent.

An analysis conducted by the Union of Concerned Scientists found that a national standard that requires all electric utilities to increase usage of renewable electricity to at least 25 percent by 2025 would create jobs, lower energy bills, and reduce harmful pollution. The analysis specifically found some 300,000 jobs would be created, $260 billion in new capital investment would occur with an additional $11 billion going to local communities from new property taxes, and consumers would save $64 billion in lower electricity and natural gas bills by 2025.

Last year, Senator Jeff Bingaman (D-NM) introduced the Clean Energy Standard Act of 2012. The Energy Information Agency projected that the legislation would reduce greenhouse gas emissions from the power sector 20 percent by 2025 and 44 percent by 2035.

2. Tax Credit Certainty

Key federal tax incentives — the production tax credit and investment tax credit — can help level the playing field for renewable energy in a market historically dominated by artificially low fossil fuel prices. These tax credits need to be extended long enough to give investors real certainty. For example, the PTC is set to expire at the end of 2013 and the ITC at the end of 2016. Each time Congress waits to renew these credits, financing gaps are created in the market.

3. Master Limited Partnerships for Renewables

If tax credits are not given long term extensions, then the panelists suggested Congress could make a provision in the tax code allowing energy-generation and transmission companies form master limited partnerships (MLPs). Felix Mormann and Dan Reicher, both at Stanford’s Steyer-Taylor Center for Energy Policy and Finance, recently wrote:

Master limited partnerships carry the fund-raising advantages of a corporation: ownership interests are publicly traded and offer investors the liquidity, limited liability and dividends of classic corporations. Their market capitalization exceeds $350 billion. With average dividends of just 6 percent, these investment vehicles could substantially reduce the cost of financing renewables.

Senator Chris Coons (D-Delaware) has written a bill entitled the Master Limited Partnerships Parity Act, which if enacted, could level the playing field and open up critical financing to the renewables sector.

Sea level rise, increased temperatures, more extreme hot days, and less winter precipitation are all climate driven changes that affect the health of California’s environment and citizens. If greenhouse gas emissions continue along its business-as-usual scenario projection, Southern California, specifically, will experience longer heat waves, high ozone conditions, and the elevation of storm surges that will cause severe flooding and coastal erosion. Indeed, researchers at Oregon State University and Harvard University recently published a report that concluded the Earth’s rate of warming since 1900 is 50 times greater than the rate of cooling in the previous 5,000 years.

California has made its move to prevent climate change from occurring by aggressively cutting emissions and deploying renewable energy. It’s time for Washington D.C. to follow their lead.

Matt Kasper is a special assistant for energy policy at the Center for American Progress.

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Weekly Address: End the Sequester to Keep Growing the Economy

The White House

Office of the Press Secretary

WASHINGTON, DC— In his weekly address, President Obama said that businesses have created jobs every month for three years straight – nearly 6.4 million altogether, and have added 246,000 new jobs in February.  We must keep this momentum going, and that’s why the President recently met with Republican leaders to discuss how we can replace the harmful, arbitrary budget cuts, called the “sequester,” with balanced deficit reduction.  By working together, the President is confident we can reduce the budget by investing in areas that help us grow, and cutting what we don’t need.

The audio of the address and video of the address will be available online at www.whitehouse.gov at 6:00 a.m. ET, Saturday, March 9, 2013.

Remarks of President Barack Obama
Weekly Address
The White House
March 9, 2013

Hi, everybody.  My top priority as President is making sure we do everything we can to reignite the true engine of America’s economic growth – a rising, thriving middle class.  

Yesterday, we received some welcome news on that front.  We learned that our businesses added nearly 250,000 new jobs last month.  The unemployment rate fell to 7.7% – still too high, but now lower than it was when I took office. 

Our businesses have created jobs every month for three years straight – nearly 6.4 million new jobs in all.  Our manufacturers are bringing jobs back to America.  Our stock market has rebounded.  New homes are being built and sold at a faster pace.  And we need to do everything we can to keep that momentum going. 

That means asking ourselves three questions every day: How do we make America a magnet for new jobs?  How do we equip more of our people with the skills those jobs require?  And how do we make sure that your hard work leads to a decent living?

That has to be our driving focus – our North Star.  And at a time when our businesses are gaining a little more traction, the last thing we should do is allow Washington politics to get in the way.  You deserve better than the same political gridlock and refusal to compromise that has too often passed for serious debate over the last few years.

That’s why I’ve been reaching out to Republicans and Democrats to see if we can untangle some of the gridlock.  Earlier this week, I met with some Republican Senators to see if there were smarter ways to grow our economy and reduce our deficits than the arbitrary cuts and the so-called “sequester” that recently went into place.  We had an open and honest conversation about critical issues like immigration reform and gun violence, and other areas where we can work together to move this country forward.  And next week, I’ll attend both the Democratic and Republican party meetings in the Capitol to continue those discussions.

The fact is, America is a nation of different beliefs and different points of view.  That’s what makes us strong, and frankly, makes our democratic debates messy and often frustrating.  But ultimately what makes us special is when we summon the ability to see past those differences, and come together around the belief that what binds us together will always be more powerful than what drives us apart. 

As Democrats and Republicans, we may disagree on the best way to achieve our goals, but I’m confident we can agree on what those goals should be.  A strong and vibrant middle class.  An economy that allows businesses to grow and thrive.  An education system that gives more Americans the skills they need to compete for the jobs of the future.  An immigration system that actually works for families and businesses.  Stronger communities and safer streets for our children.

Making progress on these issues won’t be easy.  In the months ahead, there will be more contentious debate and honest disagreement between principled people who want what’s best for this country.  But I still believe that compromise is possible.  I still believe we can come together to do big things.  And I know there are leaders on the other side who share that belief. 

So I’ll keep fighting to solve the real challenges facing middle-class families.  And I’ll enlist anyone who is willing to help.  That’s what this country needs now – and that’s what you deserve.

Thanks.

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European Economy Expected To Contract Even More In 2013

The European economy, beset by high unemployment and austerity measures aimed at reducing debts and deficits, will contract again in 2013, according to the continent’s official economic body. That would make 2013 the second consecutive year, and third in the past five, in which the 17-nation Eurozone’s economy will have shrunk, adding to its already record-high unemployment rate and further complicating the deficit reduction efforts it has pursued without fail since the end of the global recession.

Another contraction would especially hit the countries that have already been hurt the most by the recession and resulting austerity, the European Commission said. The Wall Street Journal reports:

The European Commission, the EU’s executive arm, forecasts a 0.3% contraction for 2013 and sees falling spending by businesses, consumers and national governments pushing euro-zone unemployment to a new high. Mass joblessness is expected to increase in the countries hardest hit by the crisis, with the average unemployment rate expected to reach 27% in Greece, 26.9% in Spain and 17.3% in Portugal.

Slow growth, and in some cases the lack of growth at all, has already hampered deficit reduction efforts, causing Spain, Greece, and France to miss deficit targets. French president Francois Hollande announced this week that he would not pursue further austerity to hit this year’s deficit target. The Eurozone officially fell back into recession in November.

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Meet The Congressmen Who Favor A Broken Plane Over Saving The Economy

As mandatory budget cuts loom, a group of Congressional Republicans has cheered the coming reductions in federal spending — so long as federal funding is maintained for a plane that is years behind schedule and doesn’t fly, that is.

The Department of Defense announced on Friday afternoon that it has grounded the entire fleet of F-35 Joint Strike Fighters in light of an issue with its engine. Grounding the fleet, in all three of its variations, is just the latest in a slew of setbacks to the troubled acquisition program. Produced by Lockheed Martin to the tune of $100 million per plane, the total cost of the project so far has climbed over $400 billion, making it the most expensive weapons system in U.S. history. By contrast, the Manhattan Project — which created the nuclear weapon from scratch — cost about $55 billion in today’s dollars.

The F-35 project as a whole is currently at least six years behind schedule, slated for delivery in 2015 at the earliest. Beginning on March 1, the Defense Department budget is poised to fall under the effect of mandatory budget cuts known as sequestration, cutting $1 trillion from the budget in military and domestic spending over the next ten years.

Enter the Joint Strike Fighter Caucus.

Formed in 2011, as talks to avoid sequestration were first ongoing, 49 members of the House of Representatives — hailing from both parties — signed on to protect the F-35. Several of the Republican members of the JSF Caucus, however, are among the most ardent supporters of slashing federal funding currently in Congress. Among their ranks are Rep. Ted Poe (R-TX), Rep. Lynn Westmoreland (R-GA), Rep. Paul Broun (R-GA), Rep. Phil Gingrey (R-GA), Rep. Trent Franks (R-AZ), each of whom have called for deep reductions to programs that actually work.

Broun, in a 2012 interview with Politico, estimated that he had proposed $4 billion in cuts in the House Science, Technology, and Commerce committee alone. Franks has made clear that he believes the only way to shrink the government “is to choke the monster.” Poe has compared Congress to “addicts” when it comes to spending, proposing a 12 step program to break the habit as he argued against the fiscal cliff deal.

While several Republicans have favored raising revenues to help offset sequestration, none of the Republicans listed above have joined in. Instead, the Representatives listed above all voted “aye” on a bill to replace the defense cuts in sequestration entirely with cuts on the domestic side. Cuts to defense can be made certainly made to military spending — if done smartly — making voting to protect a plane that doesn’t work in opposition to providing health care to millions of Americans near unconscionable.

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Remarks By The President On Strengthening The Economy For The Middle Class

The White House

Office of the Press Secretary

3:31 P.M. CST

THE PRESIDENT: Hey, Chicago! (Applause.) Hello, Chicago! Hello, everybody. Hello, Hyde Park! (Applause.) It is good to be home! It is good to be home. Everybody have a seat. You all relax. It’s just me. You all know me. It is good to be back home.

A couple of people I want to acknowledge -- first of all, I want to thank your Mayor, my great friend, Rahm Emanuel for his outstanding leadership of the city and his kind introduction. (Applause.) I want to thank everybody here at Hyde Park Academy for welcoming me here today. (Applause.)  

I want to acknowledge your principal and your assistant principal -- although, they really make me feel old, because when I saw them -- (laughter) -- where are they? Where are they? Stand up. Stand up. (Applause.) They are doing outstanding work. We’re very, very proud them. But you do make me feel old. Sit down. (Laughter.)

A couple other people I want to acknowledge -- Governor Pat Quinn is here doing great work down in Springfield. (Applause.) My great friend and senior Senator Dick Durbin is in the house. (Applause.) Congressman Bobby Rush is here. (Applause.) We’re in his district. Attorney General and former seatmate of mine when I was in the state senate, Lisa Madigan. (Applause.) County Board President -- used to be my alderwoman -- Tony Preckwinkle in the house. (Applause.)

And I’ve got -- I see a lot of reverend clergy here, but I’m not going to mention them, because if I miss one I’m in trouble. (Laughter.) They’re all friends of mine. They’ve been knowing me.

Some people may not know this, but obviously, this is my old neighborhood. I used to teach right around the corner. This is where Michelle and I met, where we fell in love --

AUDIENCE: Aww --

THE PRESIDENT: This is where we raised our daughters, in a house just about a mile away from here -- less than a mile. And that’s really what I’ve come here to talk about today -- raising our kids.

AUDIENCE: We love you!

THE PRESIDENT: I love you, too. (Applause.) I love you, too.

I’m here to make sure that we talk about and then work towards giving every child every chance in life; building stronger communities and new ladders of opportunity that they can climb into the middle class and beyond; and, most importantly, keeping them safe from harm.

Michelle was born and raised here -- a proud daughter of the South Side. (Applause.) Last weekend, she came home, but it was to attend the funeral of Hadiya Pendleton. And Hadiya’s parents, by the way, are here -- and I want to just acknowledge them. They are just wonderful, wonderful people. (Applause.)

And as you know, this week, in my State of the Union, I talked about Hadiya on Tuesday night and the fact that unfortunately what happened to Hadiya is not unique. It's not unique to Chicago. It's not unique to this country. Too many of our children are being taken away from us.

Two months ago, America mourned 26 innocent first-graders and their educators in Newtown. And today, I had the high honor of giving the highest civilian award I can give to the parent -- or the families of the educators who had been killed in Newtown. And there was something profound and uniquely heartbreaking and tragic, obviously, about a group of 6-year-olds being killed. But last year, there were 443 murders with a firearm on the streets of this city, and 65 of those victims were 18 and under. So that’s the equivalent of a Newtown every four months.

And that’s precisely why the overwhelming majority of Americans are asking for some common-sense proposals to make it harder for criminals to get their hands on a gun. And as I said on Tuesday night, I recognize not everybody agrees with every issue. There are regional differences. The experience of gun ownership is different in urban areas than it is in rural areas, different from upstate and downstate Illinois. But these proposals deserve a vote in Congress. They deserve a vote. (Applause.) They deserve a vote. And I want to thank those members of Congress who are working together in a serious way to try to address this issue.

But I’ve also said no law or set of laws can prevent every senseless act of violence in this country. When a child opens fire on another child, there’s a hole in that child’s heart that government can't fill -- only community and parents and teachers and clergy can fill that hole. In too many neighborhoods today -- whether here in Chicago or the farthest reaches of rural America -- it can feel like for a lot of young people the future only extends to the next street corner or the outskirts of town; that no matter how much you work or how hard you try, your destiny was determined the moment you were born. There are entire neighborhoods where young people, they don’t see an example of somebody succeeding. And for a lot of young boys and young men, in particular, they don’t see an example of fathers or grandfathers, uncles, who are in a position to support families and be held up and respected.

And so that means that this is not just a gun issue. It’s also an issue of the kinds of communities that we’re building. And for that, we all share a responsibility, as citizens, to fix it. We all share a responsibility to move this country closer to our founding vision that no matter who you are, or where you come from, here in America, you can decide your own destiny. You can succeed if you work hard and fulfill your responsibilities. (Applause.)

Now, that means we’ve got to grow our economy and create more good jobs. It means we’ve got to equip every American with the skills and the training to fill those jobs. And it means we’ve got to rebuild ladders of opportunity for everybody willing to climb them.

Now, that starts at home. There’s no more important ingredient for success, nothing that would be more important for us reducing violence than strong, stable families -- which means we should do more to promote marriage and encourage fatherhood. (Applause.) Don’t get me wrong -- as the son of a single mom, who gave everything she had to raise me with the help of my grandparents, I turned out okay. (Applause and laughter.) But -- no, no, but I think it’s -- so we’ve got single moms out here, they’re heroic in what they’re doing and we are so proud of them. (Applause.) But at the same time, I wish I had had a father who was around and involved. Loving, supportive parents -- and, by the way, that’s all kinds of parents -- that includes foster parents, and that includes grandparents, and extended families; it includes gay or straight parents. (Applause.)

Those parents supporting kids -- that’s the single most important thing. Unconditional love for your child -- that makes a difference. If a child grows up with parents who have work, and have some education, and can be role models, and can teach integrity and responsibility, and discipline and delayed gratification -- all those things give a child the kind of foundation that allows them to say, my future, I can make it what I want. And we’ve got to make sure that every child has that, and in some cases, we may have to fill the gap and the void if children don’t have that.

So we should encourage marriage by removing the financial disincentives for couples who love one another but may find it financially disadvantageous if they get married. We should reform our child support laws to get more men working and engaged with their children. (Applause.) And my administration will continue to work with the faith community and the private sector this year on a campaign to encourage strong parenting and fatherhood. Because what makes you a man is not the ability to make a child, it’s the courage to raise one. (Applause.)

We also know, though, that there is no surer path to success in the middle class than a good education. And what we now know is that that has to begin in the earliest years. Study after study shows that the earlier a child starts learning, the more likely they are to succeed -- the more likely they are to do well at Hyde Park Academy; the more likely they are to graduate; the more likely they are to get a good job; the more likely they are to form stable families and then be able to raise children themselves who get off to a good start.

Chicago already has a competition, thanks to what the Mayor is doing, that rewards the best preschools in the city -- so Rahm has already prioritized this. But what I’ve also done is say, let’s give every child across America access to high-quality, public preschool. Every child, not just some. (Applause.) Every dollar we put into early childhood education can save $7 down the road by boosting graduation rates, reducing teen pregnancy, reducing violent crime, reducing the welfare rolls, making sure that folks who have work, now they’re paying taxes. All this stuff pays back huge dividends if we make the investment. So let’s make this happen. Let’s make sure every child has the chance they deserve. (Applause.)

As kids go through school, we’ll recruit new math and science teachers to make sure that they’ve got the skills that the future demands. We’ll help more young people in low-income neighborhoods get summer jobs. We’ll redesign our high schools and encourage our kids to stay in high school, so that the diploma they get leads directly to a good job once they graduate. (Applause.)

Right here in Chicago, five new high schools have partnered with companies and community colleges to prepare our kids with the skills that businesses are looking for right now. And your College to Careers program helps community college students get access to the same kinds of real-world experiences. So we know what works. Let’s just do it in more places. Let’s reach more young people. Let’s give more kids a chance.

So we know how important families are. We know how important education is. We recognize that government alone can’t solve these problems of violence and poverty, that everybody has to be involved. But we also have to remember that the broader economic environment of communities is critical as well. For example, we need to make sure that folks who are working now, often in the hardest jobs, see their work rewarded with wages that allow them to raise a family without falling into poverty. (Applause.)

Today, a family with two kids that works hard and relies on a minimum wage salary still lives below the poverty line. That’s wrong, and we should fix it. We should reward an honest day’s work with honest wages. And that's why we should raise the minimum wage to $9 an hour and make it a wage you can live on. (Applause.)

And even though some cities have bounced back pretty quickly from the recession, we know that there are communities and neighborhoods within cities or in small towns that haven’t bounced back. Cities like Chicago are ringed with former factory towns that never came back all the way from plants packing up; there are pockets of poverty where young adults are still looking for their first job.

And that’s why on Tuesday I announced -- and that's part of what I want to focus on here in Chicago and across the country -- is my intention to partner with 20 of the hardest-hit communities in America to get them back in the game -- get them back in the game. (Applause.)

First, we’ll work with local leaders to cut through red tape and improve things like public safety and education and housing. And we’ll bring all the resources to bear in a coordinated fashion so that we can get that tipping point where suddenly a community starts feeling like things are changing and we can come back.

Second of all, if you’re willing to play a role in a child’s education, then we’ll help you reform your schools. We want to seed more and more partnerships of the kind that Rahm is trying to set up.

Third, we’re going to help bring jobs and growth to hard-hit neighborhoods by giving tax breaks to business owners who invest and hire in those neighborhoods. (Applause.)

Fourth, and specific to the issue of violence -- because it’s very hard to develop economically if people don't feel safe. If they don't feel like they can walk down the street and shop at a store without getting hit over head or worse, then commerce dries up, businesses don't want to locate, families move out, you get into the wrong cycle. So we’re going to target neighborhoods struggling to deal with violent crime and help them reduce that violence in ways that have been proven to work. And I know this is a priority of your Mayor’s; it’s going to be a priority of mine. (Applause.)

And finally, we’re going to keep working in communities all across the country, including here in Chicago, to replace run-down public housing that doesn’t offer much hope or safety with new, healthy homes for low- and moderate-income families. (Applause.)

And here in Woodlawn, you’ve seen some of the progress that we can make when we come together to rebuild our neighborhoods, and attract new businesses, and improve our schools. Woodlawn is not all the way where it needs to be, but thanks to wonderful institutions like Apostolic Church, we’ve made great progress. (Applause.)

So we want to help more communities follow your example. And let’s go even farther by offering incentives to companies that hire unemployed Americans who have got what it takes to fill a job opening, but they may have been out of work so long that nobody is willing to give them a chance right now. Let’s put our people back to work rebuilding vacant homes in need of repair. Young people can get experience -- apprenticeships, learn a trade. And we’re removing blight from our community. (Applause.)

If we gather together what works, we can extend more ladders of opportunity for anybody who’s working to build a strong, middle-class life for themselves. Because in America, your destiny shouldn’t be determined by where you live, where you were born. It should be determined by how big you’re willing to dream, how much effort and sweat and tears you’re willing to put in to realizing that dream.

When I first moved to Chicago -- before any of the students in this room were born -- (laughter) -- and a whole lot of people who are in the audience remember me from those days, I lived in a community on the South Side right up the block, but I also worked further south where communities had been devastated by some of the steel plants closing. And my job was to work with churches and laypeople and local leaders to rebuild neighborhoods, and improve schools, and help young people who felt like they had nowhere to turn.

And those of you who worked with me, Reverend Love, you remember, it wasn’t easy. Progress didn’t come quickly. Sometimes I got so discouraged I thought about just giving up. But what kept me going was the belief that with enough determination and effort and persistence and perseverance, change is always possible; that we may not be able to help everybody, but if we help a few then that propels progress forward. We may not be able to save every child from gun violence, but if we save a few, that starts changing the atmosphere in our communities. (Applause.) We may not be able to get everybody a job right away, but if we get a few folks a job, then everybody starts feeling a little more hopeful and a little more encouraged. (Applause.) Neighborhood by neighborhood, one block by one block, one family at a time.

Now, this is what I had a chance to talk about when I met with some young men from Hyde Park Academy who were participating in this B.A.M. program. Where are the guys I talked to? Stand up you all, so we can all see you guys. (Applause.) So these are some -- these are all some exceptional young men, and I couldn't be prouder of them. And the reason I'm proud of them is because a lot of them have had some issues. That's part of the reason why you guys are in the program. (Laughter.)

But what I explained to them was I had issues too when I was their age. I just had an environment that was a little more forgiving. So when I screwed up, the consequences weren't as high as when kids on the South Side screw up. (Applause.) So I had more of a safety net. But these guys are no different than me, and we had that conversation about what does it take to change. And the same thing that it takes for us individually to change, I said to them, well, that's what it takes for communities to change. That's what it takes for countries to change. It's not easy.

But it does require us, first of all, having a vision about where we want to be. It requires us recognizing that it will be hard work getting there. It requires us being able to overcome and persevere in the face of roadblocks and disappointments and failures. It requires us reflecting internally about who we are and what we believe in, and facing up to our own fears and insecurities, and admitting when we're wrong. And that same thing that we have to do in our individual lives that these guys talked about, that's what we have to do for our communities. And it will not be easy, but it can be done.  

When Hadiya Pendleton and her classmates visited Washington three weeks ago, they spent time visiting the monuments -- including the Dr. Martin Luther King, Jr. Memorial just off the National Mall. And that memorial stands as a tribute to everything Dr. King achieved in his lifetime. But it also reminds us of how hard that work was and how many disappointments he experienced. He was here in Chicago fighting poverty, and just like a lot of us, there were times where he felt like he was losing hope. So in some ways, that memorial is a testament not to work that's completed, but it’s a testament to the work that remains unfinished.

His goal was to free us not only from the shackles of discrimination, but from the shadow of poverty that haunts too many of our communities, the self-destructive impulses, and the mindless violence that claims so many lives of so many innocent young people. 

These are difficult challenges. No solution we offer will be perfect. But perfection has never been our goal. Our goal has been to try and make whatever difference we can. Our goal has been to engage in the hard but necessary work of bringing America one step closer to the nation we know we can be.

If we do that, if we’re striving with every fiber of our being to strengthen our middle class, to extend ladders of opportunity for everybody who is trying as hard as they can to create a better life for themselves; if we do everything in our power to keep our children safe from harm; if we’re fulfilling our obligations to one another and to future generations; if we make that effort, then I’m confident -- I’m confident that we will write the next great chapter in our American story. I’m not going to be able to do it by myself, though. Nobody can. We’re going to have to do it together.

Thank you, everybody. God bless you. God bless the United States of America. (Applause.)

END        3:58 P.M. CST

February 16, 2013 10:19 AM EST

In Chicago, President Obama laid out a plan to rebuild ladders of opportunity for every American who is willing to work hard and climb them

In this week’s address, President Obama calls for quick action on the proposals he made during the State of the Union to grow our economy and create jobs, including making America a magnet for manufacturing, strengthening our education system through high-quality preschool for every child, and raising the minimum wage.

The two leaders discussed the world economy and President Obama's plan to pursue a U.S.-European Union free trade agreement, which was mentioned in his State of the Union address earlier this week.

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Federal Reserve Vice Chair Excoriates Congress For Failing To Boost The Economy

Federal Reserve Vice Chair Janet Yellen

After passage of the 2009 economic stimulus package, which helped save or create millions of jobs, Congress all but gave up providing support to the labor market. Instead, in the last two years, the nation’s deficits have been reduced by $2.5 trillion, with the overwhelming majority coming from spending cuts.

In a speech today, Federal Reserve Vice Chair Janet Yellen took policymakers to task for failing to provide support for the economy, noting that spending cuts have been a “headwind for the recovery“:

Discretionary fiscal policy hasn’t been much of a tailwind during this recovery. In the year following the end of the recession, discretionary fiscal policy at the federal, state, and local levels boosted growth at roughly the same pace as in past recoveries, as exhibit 3 indicates. But instead of contributing to growth thereafter, discretionary fiscal policy this time has actually acted to restrain the recovery.

State and local governments were cutting spending and, in some cases, raising taxes for much of this period to deal with revenue shortfalls. At the federal level, policymakers have reduced purchases of goods and services, allowed stimulus-related spending to decline, and have put in place further policy actions to reduce deficits…While a long-term plan is needed to reduce deficits and slow the growth of federal debt, the tax increases and spending cuts that would have occurred last month, absent action by the Congress and the President, likely would have been a headwind strong enough to blow the United States back into recession. Negotiations continue over the extent of spending cuts now due to take effect beginning in March, and I expect that discretionary fiscal policy will continue to be a headwind for the recovery for some time, instead of the tailwind it has been in the past.

Former President Bill Clinton said much the same thing last week, noting that “everybody that’s tried austerity in a time of no growth has wound up cutting revenues even more than they cut spending because you just get into the downward spiral and drag the country back into recession.” The experience of Europe should be showing U.S. policymakers that cutting spending in a weak economy backfires, squashing economic growth, which causes debt to expand. But it doesn’t seem like that lesson is taking hold.

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4 Things The New Congressional Budget Office Projections Show Us About The Economy

The Congressional Budget Office (CBO) released its latest budget projections today, which show that the U.S. has made substantial progress towards getting its deficit and debt under control. However, the flip side of that reality is that CBO projects economic growth will be sluggish for the next several years, meaning that unemployment will only come down slowly. Here are the four biggest takeaways from the report:

1. The deficit has been reduced by a lot. As Center for American Progress Director of Tax and Budget Policy Michael Linden noted, in August 2010, CBO’s “alternative fiscal scenario” projected a deficit in 2020 of 7.8 percent of GDP. Now it projects that deficit will be 4.7 percent of GDP. The difference between the projected 2013-2020 deficit in 2010 and that same projection today adds up to $4.5 trillion in deficit reduction.

2. The debt is stabilized. Thanks to the fiscal cliff deal and previous budget agreements, most of the country’s debt problem is solved. The CBO’s report shows debt will now peak at 77.7 percent of GDP in 2014, then drop to 73.1 percent in 2018, then rise back to 76 percent in 2022. (See graph below.) According to the Economic Policy Institute, flattening out that second rise from 2018 to 2022 will only require $670 billion in additional deficit reduction — $580 billion in actual policy savings, plus $90 billion in resulting interest savings. That’s less than half the $1.5 trillion in additional deficit reduction President Obama is calling for.

3. Austerity is killing the recovery. The CBO anticipates that economic growth will be slow this year, which “reflects a combination of ongoing improvement in underlying economic factors and fiscal tightening that has already begun or is scheduled to occur — including the expiration of a 2 percentage-point cut in the Social Security payroll tax, an increase in tax rates on income above certain thresholds, and scheduled automatic reductions in federal spending.” Large austerity efforts in Europe have been stifling economic growth and causing continued economic contractions.

4. Jobs aren’t coming back fast. Due to a pronounced output gap — the gap between what the economy is producing and what it could be producing (shown below) — unemployment will remain elevated for several years. CBO projects that the unemployment rate “falls from 8.0 percent in the fourth quarter of 2013 to 6.8 percent in the fourth quarter of 2015 and then declines gradually to 5.5 percent in the fourth quarter of 2018.”

The report clearly shows that, despite the ongoing deficit hysteria in Washington, the far more pressing problem is growth and jobs.

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Weekly Address: A Balanced Approach to Growing the Economy in 2013

The White House

Office of the Press Secretary

WASHINGTON, DC— In this week’s address, President Obama called on Congress to work together on a balanced approach to reduce our deficit and promote economic growth and job creation. Our businesses created 2.2 million jobs last year, and we just learned that our economy created more jobs over the last few months than economists originally thought.  Our economy is poised to expand in 2013 if Washington politics doesn’t get in the way, and the President called on Congress to work together to keep moving us forward.

The audio of the address and video of the address will be available online at www.whitehouse.gov at 6:00 a.m. ET, Saturday, February 2, 2013.

Remarks of President Barack Obama
Weekly Address
The White House
February 2, 2013

Hi, everybody. 

In the coming weeks, we face some important decisions about how to pay down our debt in a way that grows our economy and creates good jobs – decisions that will make a real difference in the strength and pace of our recovery. 

We began this year with economists and business leaders saying that we are poised to grow in 2013.  And there are real signs of progress:  Home prices are starting to climb again.  Car sales are at a five-year high.  Manufacturing is roaring back.  Our businesses created 2.2 million jobs last year.  And we just learned that our economy created more jobs over the last few months than economists originally thought. 

But this week, we also received the first estimate of America’s economic growth over the last few months.  And it reminded us that bad decisions in Washington can get in the way of our economic progress.   

We all agree that it’s critical to cut unnecessary spending.  But we can’t just cut our way to prosperity.  It hasn’t worked in the past, and it won’t work today.  It could slow down our recovery.  It could weaken our economy.  And it could cost us jobs – now, and in the future. 

What we need instead is a balanced approach; an approach that says let’s cut what we can’t afford but let’s make the investments we can’t afford to live without.  Investments in education and infrastructure, research and development – the things that will help America compete for the best jobs and new industries. 

Already, Republicans and Democrats have worked together to reduce our deficits by $2.5 trillion.  That’s a good start.  But to get the rest of the way, we need a balanced set of reforms. 

For example, we need to lower the cost of health care in programs like Medicare that are the biggest drivers of our deficit, without just passing the burden off to seniors.  And these reforms must go hand-in-hand with eliminating excess spending in our tax code, so that the wealthiest individuals and biggest corporations can’t take advantage of loopholes and deductions that aren’t available to most Americans. 

2013 can be a year of solid growth, more jobs, and higher wages.  But that will only happen if we put a stop to self-inflicted wounds in Washington.  Everyone in Washington needs to focus not on politics but on what’s right for the country; on what’s right for you and your families.  That’s how we’ll get our economy growing faster.  That’s how we’ll strengthen our middle class.  And that’s how we’ll build a country that rewards the effort and determination of every single American. 

Thanks.  And have a great weekend.

Vice President Joe Biden, Dr. Jill Biden, and Deputy Secretary of Defense Ashton Carter visit with Wounded Warriors and their medical caretakers at Landstuhl Regional Medical Center (RMC) in Landstuhl, Germany.

Bragging rights aren't the only thing on the line for the mayors during tonight's big game -- the winning city will also get a day of service from the mayor of the opposing team.

In this week’s address, President Obama calls on Congress to work together on a balanced approach to reduce our deficit and promote economic growth and job creation.

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Sorry, New Orleans: The Super Bowl Won’t Bring A Major Boost To Your Economy

New Orleans is gearing up to host Super Bowl XLVII, the National Football League’s annual championship that will pit the Baltimore Ravens against the San Francisco 49ers on Sunday, February 3. The city and its businesses are predicting an economic boom that will result in the ultimate comeback for a city that was decimated by Hurricane Katrina in 2005.

Officials expect 150,000 people to descend on the city for the Super Bowl, and economic impact studies estimate that the game will bring $434 million to the city’s economy. Hosting three mega sporting events — the 2012 NCAA men’s Final Four and this year’s Super Bowl and women’s Final Four — will boost the city’s economy by more than $1 billion, according to an estimate from the International Business Times. And business leaders and lawmakers think the media exposure involved with hosting the big game will push the boom to immeasurable levels.

Those estimates, though, are likely fool’s gold, according to an assortment of academic research into the actual economic impact of Super Bowls and other major sporting events. When professors Victor Matheson and Robert Baade studied the economic impact of Super Bowls from 1973 to 1997, they found that the games boosted city economies by about $30 million, “roughly one-tenth the figures touted by the NFL” and an even smaller fraction of what New Orleans officials predict. A later Baade and Matheson study found that the economic impact of a Super Bowl is “on average one-quarter or less the magnitude of the most recent NFL estimates.”

Similarly, a 1999 paper from professor Philip Porter found that the Super Bowl had virtually no effect on a city’s economy. Research on other events New Orleans has hosted, including the men’s Final Four, is similar. When Baade and Matheson studied Final Fours, they found that the events tend “not to translate into any measurable benefits to the host cities.”

There are multiple reasons the estimates are often overstated. Impact estimates usually take into account how much money will be spent in the city during an event like the Super Bowl without examining how much potential spending will be lost because people don’t visit or leave the city to avoid the crowd — that is, the impact studies account for gross spending, but not net spending. And the estimates rarely include the additional cost of putting on the event, further distorting the disparity between gross and net spending figures.

Another factor is the possibility of leakages, whereby money spent doesn’t remain in the local economy. Much of the spent money will be at hotels, which often raise prices three-fold for events like the Super Bowl. But as Matheson notes in one study, those price increases don’t translate into three-fold increases for hotel employees, so much of the increased spending never makes it back into the local economy. And many Super Bowl services are outsourced to outside contractors, who don’t return all of their earnings back to the local economy either.

But even if the Super Bowl creates activity to match the most generous estimates, that wouldn’t be nearly as big a deal as it seems. Total economic activity for the New Orleans metro area totaled $80.3 billion in 2011, meaning a $434 million boost would amount to about 0.5 percent of the city’s yearly economic activity.

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Major Flu Outbreak Could Slow US Economy Further

Boston Declares Flu An Emergency A Boeing 787 Dreamliner experienced brake problems today, with CNBC's Larry Kudlow; and Boston's Mayor is declaring this year's flu season and public health emergency, with Alysha Palumbo, NECN.

This particularly devastating flu season started five weeks earlier than usual and caught many people off guard. Flu season usually peaks in late January or early February but by November the flu was already severe and widespread in some parts of the South and Southeast, and now in the Northeast and Midwest.

There have been more than 2,257 hospitalizations associated with the flu, according to the CDC. Some 18 children in the U.S have died from it.

The city of Boston has declared a pubic health emergency as a result of the flu outbreak. Massachusetts said some 18 people have died in the state from flu related illness. South Carolina reports 22 dead so far. Two people died in Sacramento, California. In Minnesota, 900 people were hospitalized because of the flu and four people died.

For the fourth week in a row, the proportion of people seeing health care providers for flu like illness is above the national average and jumped from 2.8 percent to 5.6 percent in that time, according to the Centers for Disease Control and Prevention. Last season's proportion peaked at 2.2 percent, the CDC reports.

According to the Bureau of Labor Statistics, employee absences are traditionally up during the winter flu season -- some 32 percent higher than the rest of the year. The highest number of absentees was 3.3 million in 2008 -- a severe flu season.

Employees who are sick and go into work aren't really doing their colleagues any favors, said John Challenger, CEO of Challenger, Gray & Christmas Inc, an outplacement firm.

"Sick employees may think they're doing the right thing by going in but the fact is they are only making matters worse by exposing themsevles to others," Challenger said.

"The business culture is changing and I think most firms are more accepting of people calling in sick, especially during the flu season," said Challenger. (Read more: More Than Flu Hitting)

"What a business should be doing is offering flu shots, and giving comp days to workers who are sick and feel like coming in. Coming in sick and doing sub par work won't really help," argued Challenger.

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Three December Facts That Prove ‘Uncertainty’ Isn’t Plaguing The Economy

In recent months, as the United States approached the so-called “fiscal cliff,” lawmakers and business executives argued that the supposed uncertainty brought on by the cliff’s combined automatic spending cuts and tax increases was depressing America’s economic growth. It has made a convenient narrative for chief executives who want to cut government spending and corporate taxes and institute policies more favorable to their companies.

Even in the wake of the deal to avert the fiscal cliff, which adds certainty to tax rates if not to spending cuts, CEOs are making the same argument. There is only one problem: it doesn’t appear to be true. Three indicators from December — job growth, holiday sales, and housing — prove that the uncertainty argument doesn’t hold water:

JOBS REPORT: The economy added 155,000 jobs in December, according to the Bureau of Labor Statistics’ monthly report released this morning. That was in line with projections and equal to the monthly average over the last year. Hourly earnings also rose, and the unemployment rate remained constant from November. In all, it offered no indication that the supposed uncertainty surrounding the end-of-year fiscal cliff drove down hiring over the month.

HOLIDAY SALES: Holiday sales over Thanksgiving weekend rose 13 percent in stores and online, not far from the 16 percent rise over the same weekend in 2011. And despite forecasts in mid-December that holiday sales were slumping, retailers reported a 4.5 percent jump that actually beat earlier projections. Auto manufacturers, meanwhile, had their strongest sales month since 2007.

HOUSING: Housing prices continued to rise in October (the latest data available) according to recent reports. The S&P/Case Shiller index showed that prices rose 0.7 percent, beating the 0.5 percent increase projected by economists. In the 20 cities the index follows, prices rose 4.3 percent from October 2011. The December jobs report also showed that 30,000 construction jobs were created last month, another indication that the housing market has rebounded. “The housing turnaround continues,” the Washington Post’s Jim Tankersley tweeted. “It’s driving job growth now.”

Of course, “uncertainty” is really just the CEOs’ way of asking Congress for corporate tax cuts and massive spending cuts. But their preferred budget policies have done plenty to slow down the economy. The public sector shed another 13,000 jobs in December, and it has lost more than 600,000 jobs since the end of the recession. Nonpartisan agencies from the Congressional Budget Office to the International Monetary Fund, meanwhile, have warned Congress about the perils of further spending cuts.

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Fact Sheet: The Tax Agreement: A Victory for Middle-Class Families and the Economy

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For Immediate Release January 01, 2013 Fact Sheet: The Tax Agreement: A Victory for Middle-Class Families and the Economy

At this make or break moment for the middle class, the President achieved a bipartisan solution that keeps income taxes low for the middle class and grows the economy. For the first time in 20 years, Congress will have acted on a bipartisan basis to vote for significant new revenue. This means millionaires and billionaires will pay their fair share to reduce the deficit through a combination of permanent tax rate increases and reduced tax benefits. And this agreement ensures that we can continue to make investments in education, clean energy, and manufacturing that create jobs and strengthen the middle class.

In 2011, the President cut spending. In 2012, he kept his promise of asking the wealthiest 2 percent of Americans to pay more while protecting 98 percent of families and 97 percent of small businesses from any income tax increase—raising $620 billion in revenue. As we move forward to address our ongoing fiscal challenges, both spending cuts and continuing to ask the wealthy to do a little more will be part of a balanced approach. It is critical for our economy and future generations that we reduce the deficit. We cannot keep racking up this debt on our kids. And the President looks forward to working with Republicans to reduce the deficit in a balanced and bipartisan way.

Permanently extends the middle-class tax cuts and also extends credits for working families, with additional measures to protect families and promote economic growth. 

Permanent extension of the middle class tax cuts: This will provide certainty for 114 million households including lower tax rates, an expanded Child Tax Credit, and marriage penalty relief—steps that together will prevent the typical family of four from seeing a $2,200 tax increase next year. In addition, it includes a permanent Alternative Minimum Tax (AMT) fix. Most progressive income tax code in decades: By raising income tax rates on the wealthiest and keeping taxes low for the middle class, the agreement will ensure we have the most progressive income tax code in decades. Extension of Emergency Unemployment Insurance benefits for 2 million people: The agreement will prevent 2 million people from losing UI benefits in January by extending emergency unemployment insurance benefits for one year. Extension of tax cuts for 25 million working families and students: The deal extends President Obama’s expansions of the Child Tax Credit, Earned Income Tax Credit, and the President’s new American Opportunity Tax Credit, which helps families pay for college. The President fought hard to extend these credits, overcoming Republican insistence that income taxes go up by an average of $1,000 for 25 million working families and students. The agreement would extend them for five years. Extension of renewable energy incentives, the R&E tax credit and other business incentives: The agreement extends tax relief for businesses through the end of next year. This means extending the Production Tax Credit, a key incentive for renewable energy that many Republicans had been trying to end, as well as the Research & Experimentation tax credit. In addition, the agreement extends 50 percent bonus depreciation, a cost-effective temporary measure to support investment and growth. All of these would be extended through the end of 2013. Fixes the SGR (“doc fix”) with no cuts to the Affordable Care Act or to beneficiaries: The agreement avoids a 27 percent cut to reimbursements for doctors seeing Medicare patients for 2013 by fixing the sustainable growth rate formula through the end of next year (the “doc fix”). The President stood firm against Republican proposals to pay for this fix with cuts to the Affordable Care Act or the beneficiaries. Postpones the sequester for two months, paid for with $1 of revenue for every $1 of spending, with the spending balanced between defense and domestic: The agreement saves $24 billion, half in revenue and half from spending cuts which are divided equally between defense and nondefense, in order to delay the sequester for two months. This will give Congress time to work on a balanced plan to end the sequester permanently through a combination of additional revenue and spending cuts in a balanced manner. 

Raises $620 billion in revenue according to Congress’ Joint Committee on Taxation by achieving the President’s goal of asking the wealthiest 2 percent of Americans to pay more while protecting 98 percent of families and 97 percent of small businesses from any income tax increase. 

Restores the 39.6 percent rate for high-income households, as in the 1990s: The top rate would return to 39.6 percent for singles with incomes above $400,000 and married couples with incomes above $450,000. Capital gains rates for high-income households return to Clinton-era levels: The capital gains rate would return to what it was under President Clinton, 20 percent. Counting the 3.8 percent surcharge from the Affordable Care Act, dividends and capital gains would be taxed at a rate of 23.8 percent for high-income households. These tax rates would apply to singles above $400,000 and couples above $450,000. Reduced tax benefits for households making over $250,000 (for singles) and $300,000 (for couples): The agreement reinstates the Clinton-era limits on high-income tax benefits, the phaseout of itemized deductions (“Pease”) and the Personal Exemption Phaseout (“PEP”), for couples with incomes over $300,000 and singles with incomes over $250,000. These two provisions reduce tax benefits for high-income households. This sets the stage for future balanced approaches to deficit reduction, which could include additional revenue through tax reforms that reduce tax benefits for Americans making over $250,000. Raises tax rates on the wealthiest estates: The agreement raises the tax rate on the wealthiest estates – worth upwards of $5 million per person – from 35 percent to 40 percent, in contrast to Republican proposals to continue the current estate tax levels. The agreement’s $620 billion in revenue is 85 percent of the amount raised by the Senate-passed bill, if that bill had been enacted and made permanent: The agreement locks in $620 billion in high-income revenue over the next ten years. In contrast, the bill passed by Democrats in the Senate achieved approximately $70 billion through one-year provisions; these same provisions could have raised a total of $715 billion over ten years if Congress acted again to extend it permanently. However, the Senate bill itself locked in only one year’s worth of savings so would have required additional extensions to achieve those savings. 

Part of a balanced process of deficit reduction and stronger growth. 

Strengthens our recovery next year by cutting taxes for the middle-class: The independent, non-partisan Congressional Budget Office (CBO) estimated that allowing the full effect of the “fiscal cliff” would cause our economy to enter a recession and actually shrink next year primarily as a result of higher taxes on the middle class and across-the-board spending cuts. The final agreement prevents taxes from rising on the middle class and delays the across-the-board “sequester.” Temporary measures to support consumer spending and business investment: Extending unemployment insurance is one of the more effective ways to encourage consumer spending. And bonus depreciation will give companies incentives to invest. Provides greater economic certainty for families and businesses: The agreement will make it easier for families and businesses to plan and will help our economy grow. Cuts the deficit and reduces the debt as a share of the economy over the next five years: Since April last year, the President has signed into law 1.7 trillion in deficit reduction, including $700 billion in spending cuts from enacted appropriations bills in 2011 and 2012, and $1 trillion in the Budget Control Act. This tax agreement not only further reduces the deficit, but raises $620 in new revenue from high-income households. Together with a strengthening economy these steps will bring down the deficit as a share of the economy over the next five years. Establishes a foundation for additional balanced, pro-growth deficit reduction through tax and entitlement reform: The agreement leaves substantial scope for reducing tax expenditures for high-income households, reforming corporate taxes to broaden the base and cut the rate to make America more competitive, and to take further steps to reform entitlements. 

Extends the farm bill through the end of the fiscal year, averting a sharp rise in milk prices at the beginning of 2013.  

Blog posts on this issue January 01, 2013 1:01 PM ESTWhat You Need to Know About the Bipartisan Tax Agreement

The deal passed by an overwhelming majority in the Senate keeps income taxes low for the middle class and ensures that America will continue to invest in education, clean energy, and manufacturing to strengthen our economy and the middle class.

December 30, 2012 11:44 AM ESTThe Year in Review: Joining Forces to Hire American Heroes

In 2012, working with Joining Forces, American businesses exceeded the President's challenge to hire 100,000 veterans and military spouses and made a greater commitment for the future.

December 29, 2012 5:45 AM ESTWeekly Address: Congress Must Protect the Middle Class from Income Tax Hike

President Obama urges Congress to meet its deadlines and responsibilities, protect the middle class from an income tax hike, and lay the groundwork for future progress on more economic growth and deficit reduction.

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