[Economic Report of the President (2012)]
[Administration of Barack H. Obama]
[Online through the Government Printing Office, www.gpo.gov]


To Recover, Rebalance, and Rebuild

The problems that caused the deep recession that began at the end of
2007 and lasted until mid-2009 were a long time in the making and will
not be solved overnight. But in 2011, the Nation continued to recover
from the Great Recession and to make progress toward building a
stronger foundation for more balanced and sustainable economic growth
in the future. The economy has expanded for 10 straight quarters. As a
result of this growth, by the third quarter of 2011, the real gross
domestic product (GDP) of the United States had surpassed its peak
level at the start of the 2007-09 recession. Sustaining and
strengthening the ongoing recovery remains a top priority for the Obama
Administration, while seeking to address the fundamental imbalances and
other problems that had built up for decades and erupted with the
financial and economic crisis in 2008.
The pace of the recovery has not been faster because of the severity
of the financial and economic crisis and the unique nature of the
problems that led to the crisis in the first place. These problems
included excess borrowing in the run-up to the financial crisis that
subsequently caused massive dele-veraging by households, a massive loss
of wealth during the financial crisis that continues to constrain
consumption, and excess residential home building during the housing
boom that continues to cause weakness in residential construction and
the housing sector.
Fundamentally, many of the problems that have plagued the economy in
the past decade can be traced to weak income growth for middle-class
workers. This can be seen in Figure 1-1, which displays the median
household's income each year after adjusting for inflation. Income
growth was stagnant for middle-income earners in the 2001-07 period
and, as is common, declined in the recessions at the end and beginning
of the decade. Had income grown at the same average annual rate in the
first decade of the 2000s as it did in the 1990s, middle-income
households would have greatly improved their financial situation.

A related phenomenon is that the size of the middle class has shrunk.
This disturbing trend has taken place over several decades. While those
at the top of the income distribution have seen strong income growth,
many in the middle and at the bottom have struggled. Many economists
have argued that, when confronted with easy credit and nontransparent
terms, many families borrowed at an unsustainable rate to make up for
the weak income growth they experienced in the 2000s. Strengthening and
expanding the middle class, and adequately reforming the financial
sector, are therefore at the root of the Obama Administration's
strategy to reestablish an economy that is built to last.
In addition to lingering effects of the financial crisis and the
long-standing problem of weak income growth for the middle class, the
recovery in 2011 faced additional shocks from natural disasters in
Asia, unrest in the Middle East that caused oil prices to spike,
self-inflicted wounds to confidence from the contentious debt ceiling
debate over the summer, and stress in European debt markets. Despite
these encumbrances--and with the support, in part, of measures the
President signed into law in December 2010, including the payroll tax
cut, the extension of unemployment insurance, and 100 percent business
expensing--private-sector employment has increased for 23 straight
months, and the unemployment rate fell from a high of 10.0 percent in
October 2009 to 8.3 percent in January 2012. Over the course of 2011,
the unemployment rate fell by 0.9 percentage points, the largest drop
in any year since 1994. Most of that decline occurred in the last three
of 2011.
The sharp drop in unemployment toward the end of 2011 took economic
forecasters by surprise, because unemployment was projected to remain
in the high-8-percent range by many forecasters, including the Council
of Economic Advisers (CEA). As part of the Budget process, the CEA,
together with the Office of Management and Budget and Treasury
officials, made its forecast of economic outcomes in mid-November 2011.
Since that forecast was locked down, the reported unemployment rate has
now fallen by 0.7 percentage points, and the advance estimate of GDP
growth for the fourth quarter of 2011 exceeded what most forecasters
had expected in November. In view of the new information, the consensus
of Blue Chip forecasters lowered its forecast of the unemployment rate
for the end of 2012 by about 0.8 percentage point, to 8.1 percent. The
more optimistic private forecasters expect the rate to be below 8.0
percent at the end of the year. In Chapter 2, the Report illustrates
the latest forecasting range for the unemployment rate. One of the
reasons for the range of forecasting uncertainty is that it is unclear
how many of the President's job creation initiatives Congress will
enact in the coming year. Respected private forecasters have estimated
that a continuation of the 2 percentage point payroll tax cut and
extended unemployment insurance benefits through the remainder of 2012
could significantly boost economic growth and job creation.
The Administration's economic strategy continues to be to: 1) pursue
avenues to raise demand for U.S. goods and services in the short run to
support the ongoing recovery and put more people back to work; 2)
develop credible policies to return to a fiscally sustainable path in
the intermediate and long term; and 3) invest in education, innovation,
research, domestic energy, and infrastructure in order to build a
stronger foundation for future economic growth and an expanding middle
class. Put simply, the Nation needs to recover, rebalance, and rebuild.
As described in this Report, in many instances, when Congress has not
acted, the President has taken steps to implement this agenda.


When President Obama took office on January 20, 2009, the U.S.
economy was contracting at an alarming rate, and employment was falling
by more than 700,000 jobs a month. The plunge in economic activity was
even deeper than the Bureau of Economic Analysis initially reported:
revised estimates showed that the economy contracted at an 8.9 percent

Data Watch 1-1: Innovation in Measurement

Economic statistics are central to understanding how the economy is
working--whether consumer spending is growing or shrinking, the extent
to which businesses are investing in equipment and software, the number
of people currently employed, and the wages they are earning, among many
other examples. This year's Economic Report of the President highlights
the role that accurate and timely economic measurement plays in
supporting sound economic decisions by policymakers, businesses, and
families. In a series of Data Watch boxes, the Report offers examples
of recently developed data series that shed light on economic
performance, significant gaps in available economic data, and
opportunities for improvements in the Nation's economic measures.
The growing integration of technology in our daily lives has created
an abundance of new possibilities for producing better and more timely
data based on nontraditional sources of information. As Census Bureau
Director Robert Groves has written, "(t)he volume of data generated
outside the government statistical systems is increasing much faster
than the volume of data collected by the statistical systems; almost
all of these data are digitized in electronic files" (Groves 2012).
Nontraditional sources of information include both digital
administrative data (e.g., tax records and records related to
participation in government transfer programs) and records generated
in the private sector (e.g., data from Internet searches, scanner data
and social media data).
There is a long history of using administrative records to produce
economic statistics--under strict standards of confidentiality. The
Obama Administration has endeavored to create new databases that track
student performance across different stages of education, as well as
the performance of postsecondary educational institutions. Once these
databases have been developed, analyses of the outcomes achieved by
students with different educational experiences will help to guide
improvements in instructional quality and college choice.
Innovative statistics based on electronic records compiled as a
byproduct of commercial activity also can be informative. Adding series
based on Google Trends to economic forecasting models, for example, can
improve those models' predictive power. The number of search queries
for a particular make of automobiles in the last two weeks of a month,
for instance, turns out to be a good predictor of sales of that car,
and the number of searches for real estate agencies is one of the best
predictors of current home sales (Choi and Varian 2009).
Unlike government survey data, data based on electronic records
generated for commercial or administrative purposes may not be
nationally representative, and expanding access to these records, even
for purely statistical purposes, can pose privacy concerns that must be
addressed. But their use also has the potential to improve and enrich
existing official statistics. The Bureau of Economic Analysis, for
example, plans to use credit card data to improve its statistics on
international travel services. The Census Bureau is exploring the use
of administrative data on receipt of government benefits to improve
estimates of income in its household surveys. Other uses of both
commercial and administrative data to improve official statistics can
easily be imagined. Government statistical agencies can play a vital
role in this burgeoning field by providing survey data to improve the
representativeness of nonsurvey data, and the Federal statistical
agencies can improve their measures by integrating private-sector
information. Progress in this area will ultimately lead to better
informed decisions by policymakers, businesses, and families.
rate in the last quarter of 2008, from the initial advanced estimate of
3.8 percent, the largest quarterly downward revision in history. The
Administration immediately took bold steps to turn around an economy in
free fall. It worked to stem the job losses and put people back to work
through the American Recovery and Reinvestment Act of 2009 (the
Recovery Act), and it shored up the banking system and stabilized the
financial sector through a series of measures including stress tests
for banks and rigorous requirements for banks to raise private capital
and repay the government for funds from the Troubled Asset Relief
Program, and it rescued the American auto industry.
Soon after the Recovery Act was passed, the contraction of GDP slowed
markedly to -0.7 percent in the second quarter of 2009 from -6.7
percent in the preceding quarter. Economic growth turned positive in
the third quarter of 2009, and the economy has grown at an annualized
growth rate of 2.4 percent over the past 10 quarters.
The economy is continuing to recover from the most severe downturn
since the Great Depression. Despite numerous adverse headwinds--both
domestic and international--that threatened the recovery, the U.S.
economy displayed notable resilience in 2011. Private nonfarm
employment growth, shown in Figure 1-2, averaged 174,000 jobs per month
in 2011, and 218,000 jobs per month over the past three months (ending
in January 2012). Private employers added more than 2.1 million jobs in
2011, the most in any year since 2005. At $15.3 trillion dollars, real
GDP now exceeds its pre-recession peak. Clearly, this improvement since
the end of the recession represents real progress. Nevertheless, given
the depth and severity of the Great Recession,

Data Watch 1-2: Revisions to Estimates of the Gross Domestic Product

The gross domestic product (GDP) is a summary measure of the Nation's
economic activity, constructed as the sum of personal consumption,
gross private investment, net exports, and government expenditures. The
first estimate of GDP appears within a month after the end of the
quarter to which it applies and is based, in part, on source data that
are preliminary and incomplete. More complete data are available for
the second estimate, published the following month, and the third
estimate, released the month after that; each of these revisions
incorporates new or revised information from private and public
sources, including monthly and quarterly Census Bureau surveys. Annual
revisions to the National Income and Product Accounts allow the Bureau
of Economic Analysis (BEA) to catch up in an organized way with further
revisions to the source data used to compute GDP and to incorporate
additional data available only at yearly frequencies. About every five
years, a benchmark revision incorporates data from the Economic
Censuses (Landefeld, Seskin, and Fraumeni 2008).
Between 1983 and 2009, revisions in the annualized growth rate of
real quarterly GDP between the first and latest available estimate
averaged 1.2 percentage points in absolute value (Fixler, Greenaway-
McGrevy, and Grimm 2011). A dramatic example is provided by the
revisions to the GDP growth rate for the fourth quarter of 2008, which
was originally reported as -3.8 percent and later revised down to -8.9
percent in the annual revision released in July 2011. This was the
largest downward revision to the quarterly data ever reported. Taken as
a whole, the revised data for 2008 and 2009 indicated that the recent
recession was considerably more severe than originally reported.
While revisions to initial GDP estimates for the United States can be
substantial, they are smaller than the average for other large
developed economies (see, for example, Faust, Rogers, and Wright 2005).
And despite sometimes sizable revisions, early estimates of quarterly
GDP growth generally do a good job of capturing increases or decreases
in growth rates, as well as the timing of cyclical peaks and troughs
(Fixler and Grimm 2005). Further, research has found that there is only
limited potential to improve the initial GDP estimates given the
contemporaneous information available to the BEA (Dynan and Elmendorf
2001; McKenzie, Tosetto, and Fixler 2008).
Still, more accurate early estimates of GDP would be helpful to
policymakers and businesses. Improving the quality and timeliness of
the source data available to the BEA is the best way to accomplish this

stronger economic growth and faster job gains are needed to make full
use of the Nation's human and physical resources.
On the whole, the pace of real GDP growth so far during this recovery
has been almost as fast as was the case at a similar stage of the
recoveries following the 1991 and 2001 recessions, which is noteworthy
progress given that the earlier recoveries received a strong boost from
residential home building and State and local government spending.
Because of the excess home and office construction during the housing
bubble, construction of structures has been notably weak so far in this
recovery. In addition, once Recovery Act funds began to phase out,
State and local governments cut spending and laid off workers at a
faster pace. Both of these developments are unprecedented headwinds
that were not present during other postwar recoveries.
As has been the pattern in recent recoveries, job growth has lagged a
resumption of economic growth. Job growth started in February 2010, 8
months after the official conclusion of the 2007-09 recession, versus
11 months after the end of the 1991 recession and 21 months after the
end of the 2001 recession. From February 2010 through January 2012
(months 8 through 31 after the official end of the recession), private-
sector employers added a net total of 3.7 million jobs. Over the
comparable period of the recovery from the 1991 recession, businesses
added 3.0 million jobs (from November 1991 to October 1993), and over
the comparable period of the

recovery from the 2001 recession, businesses added 1.1 million jobs
(July 200 2 to June 2004).
The catastrophic financial crisis that exacerbated the economic
downturn during the second half of 2008 is an important reason why the
pace of the recovery has not been stronger. As discussed in Chapter 2,
previous research finds that recessions associated with financial
crises not only tend to be deeper than other types of economic
downturns but also longer lasting. Yet, as bad as the Great Recession
was, the United States appears to have fared relatively better than
other countries that have experienced severe financial crises, in large
part because of the emergency actions that were taken to strengthen the
economy and stabilize the financial system. In a group of 14 countries
identified by the economists Carmen Reinhart and Kenneth Rogoff as
having experienced severe financial crises, these crises were followed
by a real GDP decline of more than 10 percent, on average. In contrast,
U.S. output decreased by substantially less. In addition, from each
country's business cycle peak to their subsequent peak unemployment
rate, the unemployment rate across these 14 countries increased by an
average of 7.7 percentage points as a result of their financial crises
(Figure 1-3).\1\

\1\ Figure 1-3 shows the average increase in the unemployment rate across
14 financial crisis recessions, regardless of how many quarters it took
the unemployment rate to reach its peak. Figure 2-4, in contrast, shows
the average rise in the unemployment rate in each quarter elapsed from
the beginning of each recession.

Although still a large increase relative to previous postwar
recessions, the U.S. unemployment rate rose by 5.1 percentage points
from the last quarter of 2007 to the fourth quarter of 2009, about 2.6
points less than the average country's experience.
The financial crisis was precipitated largely by lax credit
standards,  inadequate oversight, excessive debt, and a boom-and-bust
cycle in housing prices, which led to unsustainable expansions in
residential construction and consumer spending. Chapter 4 highlights
the challenges that remain in the housing market, deriving primarily
from institutional frictions, and explains the Administration's
initiatives for addressing many of the interlinked housing market


Once economic recovery began in mid-2009, the Obama Administration
took steps to restore balance to the U.S. economy to help prevent the
sorts of excesses that led to the financial crisis that erupted in
2008. In June 2009, the President presented his proposals for Wall
Street reform. Those proposals began a process that culminated at the
end of July 2010 with President Obama signing the Wall Street Reform
and Consumer Protection Act of 2010.
Progress is being made on rebalancing the sources of economic growth
as well. Business investment has begun to rebound. The mix of business
investment has shifted from residential and structures toward equipment
and software, the types of investments that expand capacity, help
workers become more productive, and build a foundation for sustainable
growth. Exports as a share of GDP have also grown by 13 percent since
the end of the recession. The growth in exports puts the United States
on track to meet the President's goal of doubling exports by the end of
More rebalancing is needed, and the adjustment process may continue to
cause headwinds for the recovery. As Chapter 3 details, government
balance sheets need to shift by both cutting unnecessary spending and
raising revenue to continue needed investments in the future. In
September 2011, President Obama submitted a balanced plan to the Joint
Select Committee on Deficit Reduction that would have reduced the
deficit by $4 trillion over 10 years with a mix of spending cuts and
additional revenue, and the President remains committed to pursuing a
balanced approach to put America on a sustainable fiscal path.
Finally, rebalancing in the economy is required so that the gains of
economic growth provide more opportunity for the middle class and those
struggling to get into the middle class. One step in this direction is
provided by the landmark Affordable Care Act, which will provide
premium assistance tax credits for those without access to affordable
health insurance to obtain coverage. The new law will also begin to
lower the rate of health care cost growth. Additionally, improvements
in K-12 education and greater access to postsecondary education will
provide more opportunity for middle-class families and those struggling
to get into the middle class.

Restoring Fiscal Responsibility

In the late 1990s, the Federal Government was generating budget
surpluses, both annually and throughout the 10-year budget window, as
well as actually paying down the national debt. Since 2001, Federal
debt has been growing unsustainably, primarily as a result of the 2001
and 2003 tax cuts that were skewed toward the wealthiest, increased
military operations, the unfunded Medicare prescription drug benefit,
and slow job and economic growth. Although safety net stabilizers and
job creation measures in the short term are important to keep the
recovery gaining momentum, the long-term Federal debt must be reduced.
Chapter 3 details how Federal debt shifted sharply from a downward to
an upward path to reach today's unsustainable heights, and what the
options are for reducing the long-term debt. Recognizing the economic
risks associated with increased budget deficits, the Administration and
Congress agreed on a $1 trillion deficit reduction package in the
Budget Control Act of 2011--with an additional $1.2 trillion to $1.5
trillion in further reductions scheduled to follow. In his Fiscal Year
2013 Budget, the President has proposed a balanced approach that
recognizes the need to prioritize spending initiatives while aligning
revenues with current spending.


President Obama has emphasized that the United States can
out-educate, out-innovate, and out-build the rest of the world.
Accomplishing this goal will require a Federal Government that lives
within its means and makes targeted cuts to government spending while
maintaining essential safety net services. But it will also require
continuing to invest in the Nation's future--training and educating
workers; increasing the commitment to research and technology; and
building new roads and bridges, highspeed rail, and high-speed
Internet. In cities and towns throughout America, the benefits of these
investments are clear.
Investments in education, innovation, clean energy, and
infrastructure are an essential down payment on the future. These
investments today will be the foundation of long-term output and
employment growth in the future, robust wage growth for all Americans,
and improvements in the quality of life. As emphasized, the Nation can
afford these investments only by getting its fiscal house in order. The
Federal Government has to live within its means to make room for things
it absolutely needs, without jeopardizing essential safety net
programs or the ability to make investments for the future. That is why
President Obama urged Congress to find common ground so that government
policies can, with the private sector, accelerate, not impede, economic
growth and sharpen America's competitive edge in the world.
Measured GDP growth is not the only contributor to the quality of
life that Americans seek to enjoy. Government investments as well as
regulatory policies can improve well-being by correcting market
failures and protecting safety, health, and environmental quality. In
fashioning long-term policies, the Nation should not overlook those
factors that contribute to well-being even if they are not fully
captured in economic statistics.

Jobs and Income: Today and Tomorrow

Problems that were building in the labor market for well over a
decade were amplified by the Great Recession. Chapter 6 explains where
the labor market is today and distinguishes between the effects of the
recession and longer-term trends in employment and income that predated
the recession. The goals of current policies are twofold: to increase
job growth in the near term, and to prepare Americans of all ages for
the jobs of the future. The chapter discusses the President's job
creation proposals and the key role they can play in supporting job
growth in the near term.
One notable long-term trend that can be stopped is the sharp decline
in manufacturing jobs. From 2000 to 2007, the economy lost nearly 4
million manufacturing jobs, as these positions migrated overseas.
Another 2 million manufacturing jobs were lost during the 2007-09
recession. Thanks, in part, to the President's efforts to rescue the
American auto industry, manufacturing companies have been adding jobs
for the first time since the late 1990s. On net, 400,000 manufacturing
jobs have been added in the past two years. The auto industry was
central to the rebound in manufacturing: although the auto industry
accounts for only 6 percent of industrial production, it is responsible
for 23 percent of the increase in industrial production since the end
of the recession.
As discussed in Chapter 5 and Chapter 6, a number of companies have
indicated that they are bringing jobs back to the United States because
of the Nation's high productivity and growing cost advantages. The
President has laid out a bold agenda to support this trend and to
encourage more manufacturing production at home.

Investments in education will build on America's highly productive
workforce  and are essential to prepare today's children for the jobs
of tomorrow. Increasing educational attainment for low-income children
would substantially improve their chances of moving up the rungs of the
ladder of opportunity. As shown in Figure 1-4, the average earnings of
college-educated workers has risen to a level twice as high as that of
workers with only a high school diploma. And the unemployment rate of
college graduates is about half of the national average. Yet while the
benefits of education have grown, the growth in the relative share of
college-educated American workers has slowed since 1980 (Goldin and
Katz 2008). In the last few years, however, there has been an increase
in school enrollment, and the President has set a goal for the United
States to have the highest share of 25- to 34-year-olds with a college
degree of any country by 2020. Chapter 6 lays out the strides the Obama
Administration has made in bettering the education system at every
level, making higher education more affordable, and improving job
training programs.
Making sure American workers have the right set of skills is also
critical for a revival of manufacturing jobs and jobs in other high-
paying sectors. The United States has a comparative advantage in
high-technology, innovative sectors, but jobs in such sectors require
a highly skilled workforce. As technology changes, advanced
manufacturing products can become an even more important segment of the
U.S. economy. Cars, for example, are now a highly advanced product:
fully 30 percent of the value of many automobiles is derived from
computer software, electronic components, and intellectual property,
according to industry estimates. Thus, the President's education and
job training strategy is a necessary complement to proposals to
strengthen the manufacturing sector.

Preserving and Modernizing the Safety Net

The recession highlighted the need for a strong safety net as
millions of Americans, through no fault of their own, lost their jobs
and saw their savings decline. In addition to cushioning the shock of
income loss, safety net programs are important for long-term growth
because they help maintain consumer demand in a downturn and make it
easier for entrepreneurs to take risks, knowing that if they fail, they
will have access to a minimum level of support.
As the economy has undergone major changes, the safety net has not
always adapted with it. Chapter 7 describes this changing landscape and
the steps the Administration has taken to modernize the safety net for
a more dynamic economy and more mobile workforce. The President has
already reformed health care to give millions more Americans access to
care and to

bring down costs. He has also called for the largest changes to the
unemployment insurance program in 60 years and proposes to improve
retirement preparedness by broadening the reach of individual
retirement accounts, simplifying financial decisions for retirement
savers and retirees, and promoting financial literacy.

Improving the Quality of Life through Smart Regulation, Innovation,
Clean Energy, and Public Investment

Rebuilding the American economy entails investments in the
foundations of economic growth--education, infrastructure, and research
and development. Government investments in innovation and
infrastructure and smart government regulations improve the quality of
life and help the economy to operate more efficiently.
The President has reduced burdensome regulations, where possible, but
smart regulations have also enabled Americans to live longer,
healthier, and more productive lives. As discussed in Chapter 8, the
Obama Administration has made significant reforms to the regulatory
system to better measure relevant costs and benefits and to establish a
review process that will result in continual improvement of the
regulatory architecture.
A focus on quality of life also emphasizes public investments in
innovation and infrastructure. Technological breakthroughs improve the
quality of life in ways that are not fully captured by measures of
economic activity. Cellular telephones, for example, generate large
increases in convenience that benefit consumers without being fully
captured in measures of GDP. Similarly, investments in infrastructure
improve productivity but also have other, even larger benefits. A
strong infrastructure system, for example, facilitates shorter
commuting times, increasing leisure time and improving well-being.
Ensuring that America has abundant clean energy to power the economy
of the future is also a prerequisite for raising the quality of life
and enhancing the Nation's security. Early in 2011, President Obama
noted that, "The United States of America cannot afford to bet our
long-term prosperity and security on a resource that will eventually
run out." The Administration laid out a Blueprint for a Secure Energy
Future, a comprehensive strategy that focuses on three key areas:
developing and securing America's energy supplies, including oil and
natural gas; providing consumers with choices to reduce costs and save
energy; and innovating our way to a clean energy future. This past year
has seen remarkable progress toward reaching many of these energy
goals. In 2011, domestic oil production was the highest it has been in
the past eight years and natural gas production reached an all-time
high. At the same time, the Administration has advanced common-sense
new standards to ensure the safe and responsible development of these


The U.S. economy has been expanding for two and a half years, but the
pace of economic growth and job growth has not been fast enough given
the deep hole that was created by the sharp recession that started at
the end of 2007. The economic challenges that the United States faces
are the direct result of problems that took years to build up and that
came to a boil in the financial and economic crisis of 2007-09. While
actions taken to prevent a deeper recession and to strengthen the
recovery have made a difference, the Nation is still recovering from
that profound crisis and the problems that led to it. Because household
income for vast swaths of the middle class had stagnated, many families
borrowed to support their consumption and to buy houses that later fell
in value. Families are now paying down debt, which is restraining
consumption and economic growth. Meanwhile, because of the collapse of
the housing boom, builders have been reluctant to build new homes, and
construction workers had a 16.4 percent unemployment rate in 2011. And
the government budget moved from surplus and debt reduction at the end
of the 1990s to deficit and increasing debt in the early 2000s, as the
priorities in Washington at that time shifted to increased spending to
prosecute two wars while cutting taxes in a skewed and inefficient way.
These are the Nation's principal economic challenges, not uncertainty
about economic policies, taxes, or regulations. To economists, the
solution to these problems is clear: the Nation needs to raise demand
for its goods and services in the short run to strengthen and sustain
the economic recovery and put more people back to work, while pursuing
credible policies to return to a fiscally sustainable path in the
intermediate and long term and investing more in education, innovation,
clean domestic energy, research and development, and infrastructure to
raise long-run growth and expand the middle class.