WASHINGTON — WhateverPresident Obama has accomplished, he has made little headway on the goal he values most: government action to lift long-term economic prospects for average Americans.
Mr. Obama calls it “make or break, “the defining issue of our time and his personal measure of success in the White House. But his State of the Union address on Tuesday, which is sure to highlight once again the challenges facing the middle class and the poor, could underscore his inability so far to convert talk into the taxpayer-financed investments that he and other Democrats believe can make the biggest difference. Congress has shunned a $75 billion plan to expand early childhood education that Mr. Obama proposed in last year’s State of the Union, and the infrastructure bank he has pushed for four years.
As aides draft their 2015 budget plan, their 2014 version shows this bottom line for Mr. Obama’s sixth year in office: Government investments in infrastructure, research and development, and education and training, at 3.3 percent of the nation’s economy, match the level from President George W. Bush’s sixth year in office.
That reflects the impact of the economic emergency that consumed the opening of Mr. Obama’s presidency and the effectiveness of congressional Republicans who don’t share Democrats’ confidence in government. In an era dominated by concern over deficits, Republicans have largely controlled the debate, even as Democrats have won four of the last six presidential elections.
President Bill Clinton, too, saw public investment in areas like education and transportation as critical to lifting the stagnation in middle-class living standards that began in the 1970s. Adjusted for inflation, the $283 billion in federal investments in 2000, Mr. Clinton’s last full year in office, was $6 billion lower than it was in the last year of his predecessor, President George H.W. Bush.
“It has not been possible to significantly shift the needle, said Laura D’Andrea Tyson, a professor at the University of California, Berkeley, who headed Mr. Clinton’s Council of Economic Advisers. “We should be raising those levels, and we’re not.
“I guess the good news, Ms. Tyson added, “is that the share hasn’t been plummeting.
Over the last half-century, though, it has plummeted. Spending on what the federal government classifies as investments peaked in 1968 at 6.6 percent of the economy, twice the current proportion.
Mr. Obama’s greatest success came during the recession and financial crisis in 2009. The two-year stimulus law included more than $125 billion for education and job training, $68 billion for energy projects, $48 billion for transportation and $22 billion for science and research. Some of that money has been used to spur larger investments by state and local governments and private businesses.
The administration can point to other major policies it believes have put ordinary Americans on sounder financial footing, now and in the future. The 2010 Wall Street regulation law includes new consumer protections. The Education Department’s Race to the Top program has awarded $4 billion to 19 states to upgrade elementary and secondary schools.
The Affordable Care Act includes about $940 billion in spending over 10 years to expand health insurance coverage. So long as the recent moderation in health care costs persists, White House aides contend, the law will increase the ability of businesses to raise wages.
“From the vantage point of income inequality and ensuring economic mobility, providing health care access is a pretty significant thing, said Neera Tanden, a former Obama administration official who now directs the left-leaning Center for American Progress.
Yet that is not the answer to global economic pressures that have sapped the earning power of American workers. The two parties disagree sharply on what is an effective answer.
Republicans lean more heavily on individual initiative and the private market, Mr. Obama and Democrats on government’s role in upgrading “human capital as well as the physical kind. But since theTea Party sweep of 2010, Democrats have faced mainly frustration.
The squeeze on investments in long-run projects reflects a basic truth of modern politics: Lawmakers tend to focus on the near term.
They also find it easier to cut discretionary spending — the part of the budget containing investments, which Congress approves each year — than the much larger “entitlement spending that flows automatically to those who qualify. The biggest entitlement programs, Medicare and Social Security, benefit retirees who vote in disproportionate numbers.
Republicans have fought virtually all the president’s initiatives. Douglas Holtz-Eakin, an economic adviser to the younger President Bush, asserts that Mr. Obama might have won compromises on investments in areas like infrastructure had he shown a greater commitment to change government.
Some Democrats question the president’s earlier priorities. Overhauling the health care system “was a worthy goal, Senator Charles E. Schumer, Democrat of New York, said in a speech last week, but it was not the foremost concern of Americans facing declining incomes.
Still, Mr. Schumer sees the recent bipartisan budget deal — though it merely restored domestic spending levels to those of the Bush era — as an important signal of change. Others include falling budget deficits and a change of tone in Congress, where Republicans with national ambitions, like Senator Marco Rubio of Florida and Representative Paul D. Ryan of Wisconsin, are increasingly talking about helping the poor.
“We’ve been playing on a Reagan playing field — a cut-government, shrink-programs field — since 1981, Mr. Schumer said in an interview. “It’s all turning around now.
If he is right, the president has three years left to capitalize. Neither Mr. Obama nor his aides evince much confidence.
The White House is increasingly depending on the president’s executive authority and on seeking agreements outside the government. For example, Mr. Obama has used existing funds to start manufacturing innovation centers and pressed colleges to help vulnerable students. He plans to encourage states to raise minimum wages, major businesses to expand job training, and private backers to finance early childhood education if Congress will not.
No one knows if Mr. Obama can succeed with those alternate routes to expanding economic opportunity. Budget pressures, though easing now, will only grow in the next decade as more baby boomers move onto Social Security and Medicare rolls.
“If you score him by intent and things he has proposed, he’d get pretty good marks, said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution. “If you were grading him on results, which is what matters to the next generation, he would get a much poorer grade.
