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THE WHITE HOUSE Office of the Press Secretary EMBARGOED UNTIL DELIVERY July 24, 2013 Remarks of President

Barack Obama - As Prepared for Delivery A Better Bargain for the Middle Class Galesburg, Illinois July 24, 2013 Eight years ago, I came here to deliver the commencement address for the class of 2005. Things were a little different back then. I didnt have any gray hair, for example. Or a motorcade. I didnt even have a teleprompter. It was my first big speech as your newest senator, and I spent my time talking about what a changing economy was doing to the middle class and what we, as a country, needed to do to give every American a chance to get ahead in the 21st century. You see, Id just spent a year traveling this state and listening to your stories of proud Maytag workers losing their jobs when their plant moved down to Mexico; of teachers whose salaries werent keeping up with the rising cost of groceries; of young people who had the drive but not the money to afford a college education. They were the stories of families who worked hard and believed in the American Dream, but felt that the odds were increasingly stacked against them. And they were right. In the period after World War II, a growing middle class was the engine of our prosperity. Whether you owned a company, swept its floors, or worked anywhere in between, this country offered you a basic bargain a sense that your hard work would be rewarded with fair wages and benefits, the chance to buy a home, to save for retirement, and, above all, to hand down a better life for your kids. But over time, that engine began to stall. That bargain began to fray. Technology made some jobs obsolete. Global competition sent others overseas. It became harder for unions to fight for the middle class. Washington doled out bigger tax cuts to the rich and smaller minimum wage increases for the working poor. The link between higher productivity and peoples wages and salaries was severed the income of the top 1% nearly quadrupled from 1979 to 2007, while the typical familys barely budged. Towards the end of those three decades, a housing bubble, credit cards, and a churning financial sector kept the economy artificially juiced up. But by the time I took office in 2009, the bubble had burst, costing millions of Americans their jobs, their homes, and their savings. The decades-long erosion of middle-class security was laid bare for all to see and feel. Today, five years after the start of that Great Recession, America has fought its way back.

Together, we saved the auto industry, took on a broken health care system, and invested in new American technologies to reverse our addiction to foreign oil and double wind and solar power. Together, we put in place tough new rules on big banks, and protections that cracked down on the worst practices of mortgage lenders and credit card companies. We changed a tax code too skewed in favor of the wealthiest at the expense of working families, locking in tax cuts for 98% of Americans, and asking those at the top to pay a little more. Add it all up, and over the past 40 months, our businesses have created 7.2 million new jobs. This year, we are off to our strongest private-sector job growth since 1999. And because we bet on this country, foreign companies are, too. Right now, more of Hondas cars are made in America than anywhere else. Airbus will build new planes in Alabama. Companies like Ford are replacing outsourcing with insourcing and bringing more jobs home. We sell more products made in America to the rest of the world than ever before. We now produce more natural gas than any country on Earth. Were about to produce more of our own oil than we buy from abroad for the first time in nearly 20 years. The cost of health care is growing at its slowest rate in 50 years. And our deficits are falling at the fastest rate in 60 years. Thanks to the grit and resilience of the American people, weve cleared away the rubble from the financial crisis and begun to lay a new foundation for stronger, more durable economic growth. In our personal lives, we tightened our belts, shed debt, and refocused on the things that really matter. As a country, weve recovered faster and gone further than most other advanced nations in the world. With new American revolutions in energy, technology, manufacturing, and health care, we are actually poised to reverse the forces that have battered the middle class for so long, and rebuild an economy where everyone who works hard can get ahead. But Im here today to tell you what you already know were not there yet. Even though our businesses are creating new jobs and have broken record profits, nearly all the income gains of the past ten years have continued to flow to the top 1%. The average CEO has gotten a raise of nearly 40% since 2009, but the average American earns less than he or she did in 1999. And companies continue to hold back on hiring those who have been out of work for some time. Today, more students are earning their degree, but soaring costs saddle them with unsustainable debt. Health care costs are slowing, but many working families havent seen the savings yet. And while the stock market rebound has helped families get back much of what they lost in their 401ks, millions of Americans still have no idea how theyll ever be able to retire. In many ways, the trends that I spoke of here in 2005 of a winner-take-all economy where a few do better and better, while everybody else just treads water have been made worse by the recession.

This growing inequality isnt just morally wrong; its bad economics. When middle-class families have less to spend, businesses have fewer customers. When wealth concentrates at the very top, it can inflate unstable bubbles that threaten the economy. When the rungs on the ladder of opportunity grow farther apart, it undermines the very essence of this country. Thats why reversing these trends must be Washingtons highest priority. Its certainly my highest priority. Unfortunately, over the past couple of years in particular, Washington hasnt just ignored the problem; too often, its made things worse. Weve seen a sizable group of Republican lawmakers suggest they wouldnt vote to pay the very bills that Congress rang up a fiasco that harmed a fragile recovery in 2011, and one we cant afford to repeat. Then, rather than reduce our deficits with a scalpel by cutting programs we dont need, fixing ones we do, and making government more efficient this same group has insisted on leaving in place a meat cleaver called the sequester that has cost jobs, harmed growth, hurt our military, and gutted investments in American education and scientific and medical research that we need to make this country a magnet for good jobs. Over the last six months, this gridlock has gotten worse. A growing number of Republican Senators are trying to get things done, like an immigration bill that economists say will boost our economy by more than a trillion dollars. But a faction of Republicans in the House wont even give that bill a vote, and gutted a farm bill that Americas farmers and most vulnerable children depend on. If you ask some of these Republicans about their economic agenda, or how theyd strengthen the middle class, theyll shift the topic to out-of-control government spending despite the fact that we have cut the deficit by nearly half as a share of the economy since I took office. Or theyll talk about government assistance for the poor, despite the fact that theyve already cut early education for vulnerable kids and insurance for people whove lost their jobs through no fault of their own. Or theyll bring up Obamacare, despite the fact that our businesses have created nearly twice as many jobs in this recovery as they had at the same point in the last recovery, when there was no Obamacare. With an endless parade of distractions, political posturing and phony scandals, Washington has taken its eye off the ball. And I am here to say this needs to stop. Shortterm thinking and stale debates are not what this moment requires. Our focus must be on the basic economic issues that the matter most to you the people we represent. And as Washington prepares to enter another budget debate, the stakes for our middle class could not be higher. The countries that are passive in the face of a global economy will lose the competition for good jobs and high living standards. Thats why America has to make the investments necessary to promote long-term growth and shared prosperity. Rebuilding our manufacturing base. Educating our workforce. Upgrading our transportation and information networks. Thats what we need to be talking about. Thats what Washington needs to be focused on.

And thats why, over the next several weeks, in towns across this country, I will engage the American people in this debate. I will lay out my ideas for how we build on the cornerstones of what it means to be middle class in America, and what it takes to work your way into the middle class in America. Job security, with good wages and durable industries. A good education. A home to call your own. Affordable health care when you get sick. A secure retirement even if youre not rich. Reducing poverty and inequality. Growing prosperity and opportunity. Some of these ideas Ive talked about before, and some will be new. Some will require Congress, and some I will pursue on my own. Some will benefit folks right away; some will take years to fully implement. But the key is to break through the tendency in Washington to careen from crisis to crisis. What we need isnt a three-month plan, or even a three-year plan, but a long-term American strategy, based on steady, persistent effort, to reverse the forces that have conspired against the middle class for decades. Of course, well keep pressing on other key priorities, like reducing gun violence, rebalancing our fight against al Qaeda, combating climate change, and standing up for civil rights and womens rights. But if we dont have a growing, thriving middle class, we wont have the resources or the resolve; the optimism or sense of unity that we need to solve these other issues. In this effort, I will look to work with Republicans as well as Democrats wherever I can. I believe there are members of both parties who understand whats at stake, and I will welcome ideas from anyone, from across the political spectrum. But I will not allow gridlock, inaction, or willful indifference to get in our way. Whatever executive authority I have to help the middle class, Ill use it. Where I cant act on my own, Ill pick up the phone and call CEOs, and philanthropists, and college presidents anybody who can help and enlist them in our efforts. Because the choices that we, the people, make now will determine whether or not every American will have a fighting chance in the 21st century. Let me give you a quick preview of what Ill be fighting for and why. The first cornerstone of a strong and growing middle class has to be an economy that generates more good jobs in durable, growing industries. Over the past four years, for the first time since the 1990s, the number of American manufacturing jobs hasnt gone down; theyve gone up. But we can do more. So Ill push new initiatives to help more manufacturers bring more jobs back to America. Well continue to focus on strategies to create good jobs in wind, solar, and natural gas that are lowering energy costs and dangerous carbon pollution. And Ill push to open more manufacturing innovation institutes that turn regions left behind by global competition into global centers of cutting-edge jobs. Lets tell the world that America is open for business including an old site right here in Galesburg, over on Monmouth Boulevard.

Tomorrow, Ill also visit the port of Jacksonville, Florida to offer new ideas for doing what America has always done best: building things. Weve got ports that arent ready for the new supertankers that will begin passing through the new Panama Canal in two years time. Weve got more than 100,000 bridges that are old enough to qualify for Medicare. Businesses depend on our transportation systems, our power grids, our communications networks and rebuilding them creates good-paying jobs that cant be outsourced. And yet, as a share of our economy, we invest less in our infrastructure than we did two decades ago. Thats inefficient at a time when its as cheap as its been since the 1950s. Its inexcusable at a time when so many of the workers who do this for a living sit idle. The longer we put this off, the more expensive it will be, and the less competitive we will be. The businesses oftomorrow wont locate near old roads and outdated ports; theyll relocate to places with high-speed internet; high-tech schools; systems that move air and auto traffic faster, not to mention get parents home to their kids faster. We can watch that happen in other countries, or we can choose to make it happen right here, in America. In an age when jobs know no borders, companies will also seek out the country that boasts the most talented citizens, and reward them with good pay. The days when the wages for a worker with a high-school degree could keep pace with the earnings of someone who got some higher education are over. Technology and global competition arent going away. So we can either throw up our hands and resign ourselves to diminished living standards, or we can do what America has always done: adapt, pull together, fight back and win. Which brings me to the second cornerstone of a strong middle class: an education that prepares our children and our workers for the global competition theyll face. If you think education is expensive, wait until you see how much ignorance costs in the 21stcentury. If we dont make this investment, well put our kids, our workers, and our country at a competitive disadvantage for decades. So we must begin in the earliest years. Thats why Ill keep pushing to make high-quality preschool available to every four year-old in America not just because we know it works for our kids, but because it provides a vital support system for working parents. Ill also take action to spur innovation in our schools that dont require Congress. Today, for example, federal agencies are moving on my plan to connect 99% of Americas students to high-speed internet over the next five years. And weve begun meeting with business leaders, tech entrepreneurs, and innovative educators to identify the best ideas for redesigning our high schools so that they teach the skills required for a high-tech economy. Well also keep pushing new efforts to train workers for changing jobs. Here in Galesburg, many of the workers laid off at Maytag chose to enroll in retraining programs like the ones at Carl Sandburg College. And while it didnt pay off for everyone, many who retrained found jobs that suited them even better and paid even more. Thats why I asked Congress to start a Community College to Career initiative, so that workers can earn the skills that high-tech jobs demand without leaving their hometown. And Im challenging CEOs from some of Americas best companies to hire more Americans

whove got what it takes to fill that job opening, but have been laid off so long no one will give their resume an honest look. Im also going to use the power of my office over the next few months to highlight a topic thats straining the budgets of just about every American family the soaring cost of higher education. Three years ago, I worked with Democrats to reform the student loan system so that taxpayer dollars stopped padding the pockets of big banks, and instead helped more kids afford college. I capped loan repayments at 10% of monthly income for responsible borrowers. And this week, were working with both parties to reverse the doubling of student loan rates that occurred a few weeks ago because of Congressional inaction. Its all a good start but it isnt enough. Families and taxpayers cant just keep paying more and more into an undisciplined system; weve got to get more out of what we pay for. Some colleges are testing new approaches to shorten the path to a degree, or blending teaching with online learning to help students master material and earn credits in less time. Some states are testing new ways to fund college based not just on how many students enroll, but how well they do. This afternoon, Ill visit the University of Central Missouri to highlight their efforts to deliver more bang for the buck. And in the coming months, I will lay out an aggressive strategy to shake up the system, tackle rising costs, and improve value for middle-class students and their families. Now, if a good job and a good education have always been key stepping stones into the middle class, a home of your own has been the clearest expression of middle-class security. That changed during the crisis, when millions of middle-class families saw their home values plummet. Over the past four years, weve helped more responsible homeowners stay in their homes, and today, sales are up, prices are up, and fewer Americans see their homes underwater. But were not done yet. The key now is to encourage homeownership that isnt based on bubbles, but is instead based on a solid foundation, where buyers and lenders play by the same set of rules, rules that are clear, transparent, and fair. Already, Ive asked Congress to pass a good, bipartisan idea one that was championed by Mitt Romneys economic advisor to give every homeowner the chance to refinance their mortgage and save thousands of dollars a year. Im also acting on my own to cut red tape for responsible families who want to get a mortgage, but the bank says no. And well work with both parties to turn the page on Fannie and Freddie, and build a housing finance system thats rock-solid for future generations. Along with homeownership, the fourth cornerstone of what it means to be middle class in this country is a secure retirement. Unfortunately, over the past decade, too many families watched their retirement recede from their grasp. Today, a rising stock market has millions of retirement balances rising. But we still live with an upside-down system where those at the top get generous tax incentives to save, while tens of millions of hardworking Americans get none at all. As we work to reform our tax code, we should

find new ways to make it easier for workers to put money away, and free middle-class families from the fear that theyll never be able to retire. And if Congress is looking for a bipartisan place to get started, they dont have to look far: economists show that immigration reform that makes undocumented workers pay their full share of taxes would actually shore up Social Security for years. Fifth, I will keep focusing on health care, because middle-class families and small business owners deserve the security of knowing that neither illness nor accident should threaten the dreams youve worked a lifetime to build. As we speak, we are well on our way to fully implementing the Affordable Care Act. If youre one of the 85% of Americans who already have health insurance, youve got new benefits and better protections you didnt have before, like free checkups and mammograms and discounted medicine on Medicare. If you dont have health insurance, starting October 1st, private plans will actually compete for your business. You can comparison shop in an online marketplace, just like you would for TVs or plane tickets, and buy the one that fits your budget and is right for you. And if youre in the up to half of all Americans whove been sick or have a preexisting condition, this law means that that beginning January 1st, insurance companies finally have to cover you, and at the same rates they charge everybody else. Now, I know there are folks out there who are actively working to make this law fail. But despite a politically-motivated misinformation campaign, the states that have committed themselves to making this law work are finding that competition and choice are actually pushing costs down. Just last week, New York announced that premiums for consumers who buy their insurance in these online marketplaces will be at least 50% less than what they pay today. Thats right folks premiums in the individual market will drop by 50%. For them, and for the millions of Americans who have been able to cover their sick kids for the first time, or have been able to cover their employees more cheaply, or who will be getting tax breaks to afford insurance for the first time you will have the security of knowing that everything youve worked hard for is no longer one illness away from being wiped out. Finally, as we work to strengthen these cornerstones of middle-class security, Im going to make the case for why we need to rebuild ladders of opportunity for all those Americans still trapped in poverty. Here in America, weve never guaranteed success. More than some other countries, we expect people to be self-reliant, and weve tolerated a little more inequality for the sake of a more dynamic, more adaptable economy. But thats always been combined with a commitment to upward mobility the idea that no matter how poor you started, you can make it with hard work and discipline. Unfortunately, opportunities for upward mobility in America have gotten harder to find over the past 30 years. Thats a betrayal of the American idea. And thats why we have to do a lot more to give every American the chance to work their way into the middle class.

The best defense against all of these forces global competition and economic polarization is the strength of community. We need a new push to rebuild run-down neighborhoods. We need new partnerships with some of the hardest-hit towns in America to get them back on their feet. And because no one who works full-time in America should have to live in poverty, I will keep making the case that we need to raise a minimum wage that in real terms is lower than it was when Ronald Reagan took office. We are not a people who allow chance of birth to decide lifes big winners and losers; and after years in which weve seen how easy it can be for any of us to fall on hard times, we cannot turn our backs when bad breaks hit any of our fellow citizens. Good jobs. A better bargain for the middle class and folks working to join it. An economy that grows from the middle-out. This is where I will focus my energies not just over the next few months, but for the remainder of my presidency. These are the plans that I will lay out across this country. But I wont be able to do it alone, and Ill be calling on all of us to take up this cause. Well need our businesses, the best in the world, to pressure Congress to invest in our future, and set an example by providing decent wages and salaries to their own employees. And Ill highlight the ones that do just that companies like Costco, which pays good wages and offers good benefits; or the Container Store, which prides itself on training its workers and on employee satisfaction because these companies prove that this isnt just good for their business, its good for America. Well need Democrats to question old assumptions, be willing to redesign or get rid of programs that no longer work, and embrace changes to cherished priorities so that they work better in this new age. For if we believe that government can give the middle class a fair shot in this new century, we have an obligation to prove it. And well need Republicans in Congress to set aside short-term politics and work with me to find common ground. The fact is, there are Republicans in Congress right now who privately agree with me on many of the ideas Ill be proposing, but worry theyll face swift political retaliation for saying so. Others will dismiss every idea I put forward either because theyre playing to their most strident supporters, or because they have a fundamentally different vision for America one that says inequality is both inevitable and just; one that says an unfettered free market without any restraints inevitably produces the best outcomes, regardless of the pain and uncertainty imposed on ordinary families. In either case, I say to these members of Congress: I am laying out my ideas to give the middle class a better shot. Now its time for you to lay out yours. If youre willing to work with me to strengthen American manufacturing and rebuild this countrys infrastructure, lets go. If you have better ideas to bring down the cost of college for working families, lets hear them. If you think you have a better plan for making sure every American has the security of quality, affordable health care, stop taking meaningless repeal votes and share your concrete ideas with the country. If you are serious about a balanced, long-term fiscal plan that replaces the mindless cuts currently in

place, or tax reform that closes corporate loopholes and gives working families a better deal, Im ready to work but know that I will not accept deals that do not meet the test of strengthening the prospects of hard-working families. Weve come a long way since I first took office. As a country, were older and were wiser. And as long as Congress doesnt manufacture another crisis as long as we dont shut down the government just as the economy is getting traction, or risk a U.S. default over paying bills weve already racked up we can probably muddle along without taking bold action. Our economy will grow, though slower than it should; new businesses will form, and unemployment will keep ticking down. Just by virtue of our size and our natural resources and the talent of our people, America will remain a world power, and the majority of us will figure out how to get by. But if thats our choice if we just stand by and do nothing in the face of immense change understand that an essential part of our character will be lost. Our founding precept about wide-open opportunity and each generation doing better than the last will be a myth, not reality. The position of the middle class will erode further. Inequality will continue to increase, and moneys power will distort our politics even more. Social tensions will rise, as various groups fight to hold on to what they have, and the fundamental optimism that has always propelled us forward will give way to cynicism or nostalgia. Thats not the vision I have for this country. Thats not the vision you have for this country. That is not the America we know. Thats not a vision we should settle for, or pass on to our children. I have now run my last campaign. I do not intend to wait until the next one before tackling the issues that matter. I care about one thing and one thing only, and thats how to use every minute of the 1,276 days remaining in my term to make this country work for working Americans again. Because I believe this is where America needs to go. I believe this is where the American people want to go. It may seem hard today, but if we are willing to take a few bold steps if Washington will just shake off its complacency and set aside the kind of slash-and-burn partisanship weve seen these past few years our economy will be stronger a year from now. And five years from now. And ten years from now. More Americans will know the pride of that first paycheck; the satisfaction of flipping the sign to Open on their own business; the joy of etching a childs height into the door of their brand new home. After all, what makes us special has never been our ability to generate incredible wealth for the few, but our ability to give everyone a chance to pursue their own true measure of happiness. We havent just wanted success for ourselves weve wanted it for our neighbors, too. Thats why we dont call it Johns dream or Susies dream or Baracks dream we call it the American Dream. Thats what makes this country special the idea that no matter who you are, what you look like, where you come from or who you love you can make it if you try. One of Americas greatest writers, Carl Sandburg, was born right here in Galesburg over a century ago. He saw the railroad bring the world to the prairie, and the prairie send its

bounty to the world. He saw the advent of bustling new industries and technologies; he watched populations shift; he saw fortunes made and lost. He saw how change could be painful how a new age could unsettle long-settled customs and ways of life. But possessed with a frontier optimism, he saw something more on the horizon. I speak of new cities and new people, he wrote. The past is a bucket of ashesyesterday is a wind gone down, a sun dropped in the westthere isonly an ocean of tomorrows, a sky of tomorrows. America, we have made it through the worst of yesterdays winds. And if we find the courage to keep moving forward; if we set our eyes on the horizon, we too will find an ocean of tomorrows, a sky of tomorrows for Americas people, and for this great country that we love. Thank you, God bless you, and God bless the United States of America. ###