By White House | on 25 March 2017
In 2008, the American people turned to Barack Obama to lead the country through the worst economic crisis since the Great Depression. His North Star was to make the economy work for the middle class and for those fighting to join it. He took steps to create jobs, rescue the auto industry, and rebuild the economy on a new foundation for growth and prosperity.
In 2008, the American people turned to Barack Obama to lead the country through the worst economic crisis since the Great Depression. His North Star was to make the economy work for the middle class and for those fighting to join it. He took steps to create jobs, rescue the auto industry, and rebuild the economy on a new foundation for growth and prosperity.
Stabilized an Economy in Crisis and Laid the Groundwork for Long-Term Growth
Took steps to help the hardest-hit Americans. Without the Recovery Act’s boost to household incomes, the poverty rate would have risen an additional 1.7 percentage points—which translates into about 5.3 million additional people that would have slipped into poverty in 2010
Helping the Hardest-Hit Americans
- Expanded and extended emergency unemployment benefits ten times, helping a total of 21 million Americans.
- Increased benefits and expanded access to the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps lifting more than 500,000 households out of food insecurity.
- Provided additional subsidies so that workers who lost their jobs could continue their health insurance coverage.
- Provided incentives for companies to hire unemployed veterans and disconnected youth.
- Boosted federal Medicaid payments to help states provide health coverage.
- Provided funding to states to support subsidized jobs for 260,000 low-income parents and youth and provided more than $1 billion for youth summer jobs.
- Oversaw 250,000 rural jobs created in 2014 and 2015 combined, and a 3.4 percent increase in rural household incomes from 2014 to 2015. Read more about how rural America is back in business.
Provided tax relief that gave the typical American family a tax cut of $3,600 over the first four years of the Administration — helping to restart job growth — and made important tax cuts permanent for working families and families with college students.
Tax Relief for Middle Class and Working Families
- Created the Making Work Pay tax credit for families with incomes of up to $150,000, providing a credit of up to $400 for individuals and $800 for couples as the economy recovered from the depths of the Recession in 2009 and 2010.
- Cut the payroll tax for everyone who pays it, boosting the typical family’s income by about $1,000 in 2011 and 2012 and helping about 160 million workers and their families.
- Expanded the Child Tax Credit for low-wage working families; later made that expansion permanent in the 2015 tax and budget agreement.
- Expanded the Earned-Income Tax Credit (EITC) for working families with more than two children and reduced EITC marriage penalties; later made those expansions permanent in the 2015 tax and budget agreement.
- Created the American Opportunity Tax Credit (AOTC), an up to $2,500 per-year tax credit (up to $10,000 over four years) to help students and their families pay for college; later made the AOTC permanent in the 2015 tax and budget agreement.
Secured substantial reforms to improve education for all Americans — from catalyzing reforms of K-12 education to investing in community colleges to making it easier for students to afford higher education
A Down Payment on Education
- Catalyzed significant state education reforms to adopt higher academic standards to prepare students for college and careers, which 49 states and the District of Columbia have done; invested in great teachers and leaders; and turned around low-performing schools through $4 billion in Race to the Top competition. Following these reforms, the high school graduation rate reached its highest level ever recorded, dropout rates fell sharply for low-income and minority students, and since 2008, college enrollment for African-Americans and Hispanics has increased by more than one million students.
- Increased maximum Pell Grant awards by $500 in the Recovery Act; later increased the maximum by more than $1,000 above the 2008 level, helping millions of students afford college.
- Supported continuing education for American workers by increasing available funding for incumbent workers and working with companies to upskill thousands of workers.
- Provided federal funding to prevent hundreds of thousands of teacher and first responder job losses.
Invested in building the economy of the future, from physical and technological infrastructure — including roads, bridges, and broadband — to scientific research to the largest investment in clean energy in history
Critical Investments in the Future
- Invested over $5 billion to lay and upgrade over 114,500 miles of fiber-optic cable, connecting community anchors around the nation to fast broadband Internet.
- Provided billions of dollars in the Recovery Act to improve nearly 42,000 miles of road, repair or replace more than 2,700 bridges, help transit agencies purchase more than 12,220 transit vehicles, upgrade or construct more than 6,000 miles of better performing rail, and increase safety and convenience with more than 360 airport and runway projects.
- Created the Transportation Investment Generating Economic Recovery (TIGER) program, which has invested billions of dollars in high-impact transportation projects around the country.
- Funded investments in smart grid technology, renewable energy, and energy efficiency programs.
- Created Build America Bonds, a new financing vehicle that supported $181 billion of public capital investments such as schools, bridges, and hospitals, and saved states $20 billion in borrowing costs, as well as Recovery Zone Bonds for hard-hit cities.
- USDA convened private and philanthropic partners to create a new U.S. Rural Infrastructure Opportunity Fund, with commitments of $10 billion of private funds to finance rural infrastructure projects. Read more about the Rural Infrastructure Investment Fund.
Brought Stability to a Financial Sector in Crisis
Restructured AIG, the world’s largest insurer, to prevent its catastrophic collapse; recovered the entire taxpayer investment plus a $22.7 billion positive return
Recapitalized the financial system so it could withstand the downturn and start lending again; recovered the entire taxpayer investment into the banks, plus a nearly $30 billion positive return
Treasury invested approximately $245 billion across five bank programs. Each of these programs was established to accomplish different goals as part of the overall effort to stabilize America's banking system. Because of the aggressive response, the financial system stabilized and Treasury has recovered $275 billion, a nearly $30 billion positive return to the taxpayer.
Created and conducted a comprehensive stress test for the nation’s largest banks in May 2009 to ensure they had sufficient capital to withstand a Great Depression-like scenario. The added transparency helped banks to raise $66 billion in capital from private markets within a month of the stress test.
Supervisory Capital Assessment Program & Capital Assistance Program
The Supervisory Capital Assessment Program (SCAP) and the Capital Assistance Program (CAP) were established to ensure that our major banking institutions had adequate capital buffers to withstand losses and continue to lend to businesses, large and small, and consumers to support the economy.
Launched programs to restart crucial lending markets for student and auto loans, other forms of consumer credit, housing, and small businesses
Restarted Crucial Lending Markets
- Expanded the Term Asset-Backed Securities Loan Facility (TALF) to kick-start a secondary lending market to lower borrowing costs and get credit flowing again, especially for student and auto loans; recovered the entire taxpayer investment.
- Established the Public-Private Investment Program (PPIP) to create markets for the legacy securities and real estate-related assets that were at the center of the financial crisis; recovered the entire taxpayer investment of $18.6 billion plus a net positive return of more than $3.9 billion on a cash basis.
- Launched the Small Business Administration (SBA) 7(a) Securities Purchase Program as part of the Obama Administration’s efforts to help small businesses; recovered the entire taxpayer investment plus a small positive return.
Coordinated a global response to the financial crisis at a London G-20 meeting in April 2009 that marshaled more than $1 trillion of support to restore credit, growth, and jobs in the global economy
“During our London Summit, we and our G-20 partners agreed that we will make more than $1 trillion in financial resources available to support global growth and trade. Much of that total will go to the emerging and developing countries, which as recently as the fall of last year accounted for fully 42% of all U.S. exports. That will improve their economic and financial health which, in turn, will help improve ours.” – Secretary Timothy F. Geithner
Brought Stability to The Housing Sector
Made it easier for responsible homeowners to stay in their homes — avoiding foreclosures that would have hurt them and the economy and helping underwater homeowners refinance. In all, more than 10 million mortgage modification and other forms of mortgage assistance were completed to help mitigate the foreclosure crisis
Helped Families Stay in Their Homes
- Established a loan modification program to help more than 1.5 million homeowners lower their mortgages and avoid foreclosure, with more than 4.5 million more homeowners receiving private modifications that built on the framework provided by the government model.
- Helped underwater homeowners avoid foreclosure through programs that allow them to sell their home or reduce payments on—or extinguish—their second lien.
- Provided a delayed payment plan of up to 12 months for unemployed homeowners.
- Launched an Office of Housing Counseling and worked with HUD-approved housing counselors to assist millions of families in making smart and informed financial decisions, including by providing housing counseling for unemployed homeowners at job training centers.
Established a mortgage refinancing program for underwater borrowers (i.e. those whose house is worth less than their mortgage), to help more than 3.3 million Americans overcome barriers to refinancing and lower their monthly payments
Check out our latest housing scorecard for more on our response to the housing crisis.
Helped state and local housing finance agencies through the New Issue Bond Program to extend affordable mortgage credit to families and enable the development and rehabilitation of tens of thousands affordable rental units
New Issue Bond Program
The New Issue Bond Program filled in the financing vacuum for Housing Finance Agencies when the tax exempt market seized up during the crisis. It enabled tens of thousands of affordable multi-family units to be financed during the crisis and tens of thousands of mortgages for affordable homes to be funded through participating Housing Finance Agencies.
Launched a program to require investors who purchase distressed Federal Housing Administration (FHA) loans to maintain the properties in a manner that avoids the kinds of vacancy and abandonment that downgrade the community
The Minimum Property Standards (MPS) establish certain minimum standards for buildings constructed under HUD housing programs. This includes new single family homes, multi-family housing and health care type facilities.
Stepped up lending through the FHA, bolstering its capital reserves to the point where the Administration was able to lower the FHA mortgage insurance premium
Making Homeownership More Accessible and Sustainable
In 2015, the Federal Housing Administration (FHA) reduced annual mortgage insurance premiums by 0.5 percentage point from 1.35 percent to 0.85 percent. For the typical first-time homebuyer, this reduction translates into a $900 reduction in their annual mortgage payment.
Negotiated the National Mortgage Servicing Settlement with 49 state attorneys general and major banks and mortgage companies to establish new servicing standards and provide more than $50 billion of relief to distressed homeowners
The National Mortgage Settlement
On February 9, 2012, then-Attorney General Eric Holder announced that the federal government and 49 states had reached a settlement agreement with the nation’s five largest mortgage servicers to address mortgage servicing, foreclosure, and bankruptcy abuses (the “National Mortgage Settlement”).
Launched mortgage fraud cases against thousands of defendants
Protecting Taxpayer Dollars and Consumers Against Financial Fraud While Ensuring Competitive Markets
Improved the quality of public housing for residents across the country through a new HUD tool that helps provide stable sources of funding for property improvements
The Rental Assistance Demonstration provides public housing authorities (PHAs) with a way to rehabilitate or repair units without depending on additional money from Congress. Congress has not provided enough funding for PHAs to keep up with capital needs. As a result, PHAs have had to make tough choices between things like repairing roofs and replacing plumbing—or worse, demolishing public housing.
Saved the American Auto Industry
Required that Chrysler and General Motors (GM) adopt viable restructuring plans in exchange for temporary federal loan support, including building more fuel efficient cars
The auto industry has fully exited the temporary federal programs that supported them, repaying the American taxpayer every dollar and more of what the Obama Administration committed
On December 19, 2014, Treasury announced that it had exited the last Troubled Asset Relief Program (TARP) equity investment under the Auto Industry Financing Program.
Launched “Cash for Clunkers” to spur auto sales
Did 'Cash-for-Clunkers' work as intended?
A plausible interpretation of the available data, in fact, is that many of the auto sales catalyzed by the CARS program were to the kinds of thrifty people who can afford to buy a new car but normally wait until the old one is thoroughly worn out. Stimulating spending by such people acted as an incredibly positive countercyclical fiscal policy in an economy suffering from temporarily low aggregate demand.
READ MORE
Reformed Wall Street
Adopted the Volcker Rule to prohibit banks from risky proprietary trading and from sponsoring investment funds that are unrelated to core banking activities
Set higher capital and liquidity standards for financial institutions both domestically and internationally
Also required the largest, most complex firms in the U.S. to meet higher capital, liquidity, and risk management standards than other firms that pose less systemic risk.
Since the crisis, banks have added more than $600 billion of additional capital, which is money they can lend and which increases their resiliency.
Established orderly liquidation authority to prevent serious harm to the entire economy and to protect taxpayers from bearing the losses of private firms by giving regulators the tools to safely wind down large, complex financial institutions that fail
Meet the Law That’s Been Quietly Protecting You and Strengthening Our Economy for the Past 6 Years
"When large, complex, or interconnected firms (like Lehman Brothers) failed during the crisis, the regulators didn’t have the tools they needed to wind them down safely, without bringing down our entire financial system. That left us with a pretty awful choice: Let our system collapse and risk another Great Depression (which nearly happened after Lehman failed), or have taxpayers step in to clean up the mess? Wall Street reform fixed that. Today, regulators have something called “orderly liquidation authority,” which is a fancy way of saying that if a big Wall Street firm implodes again, taxpayers aren’t on the hook — investors in the firm and the financial industry pick up the tab. By law, no firm is too big to fail."
Expanded reporting requirements for hedge funds and private equity funds
Greater Transparency: Wall Street Reform re-aligned incentives in derivatives and securitization markets, hedge fund reporting requirements, and executive compensation:
- Derivatives Reform: Wall Street Reform is bringing oversight and transparency to the over-the-counter (OTC) derivatives markets — shedding light on complex derivatives transactions.
- Securitization Reform: Dodd-Frank has strengthened the securitization process, to better protect investors and minimize the threats to financial stability.
- Hedge Fund Registration: Hedge funds and other private funds are now subject to registration, recordkeeping, and disclosure obligations.
- Executive Compensation: Wall Street Reform helps align business decisions and compensation with the interests of shareholders — increasing disclosure of executive compensation for publicly traded firms, giving shareholders an advisory “say on pay” for senior executives, and requiring that the board compensation committees be independent.
Overhauled the $600 trillion derivatives market to make it safer and more transparent, including by leading an international push to mandate central clearing of standardized derivatives, setting capital and margin requirements for derivatives that are not centrally cleared, and imposing new oversight of major swap dealers and participants
Transparency: Five Years after the Dodd-Frank Act
The financial crisis demonstrated that financial markets had become unacceptably and dangerously opaque. This lack of transparency allowed risks to build and be transmitted across different sectors of the financial system. As the financial crisis unfolded, not only did federal financial regulators lack adequate tools to address these risks, they had limited knowledge of their size, nature, and interconnectedness. And market participants pulled back further during the depths of the crisis in part as a result of incomplete market information.
Set new accounting standards to move all exposures onto firms’ balance sheets
The Financial Crisis: Five Years Later
Required large banks to create “living wills” to help regulators wind down bankrupt firms in an orderly fashion
New rules help make large financial companies simpler to unwind by requiring “living wills” that provide a roadmap for resolving the institution. These reforms force firms to bear the costs of their own risk-taking, instead of the taxpayer.
Established the Consumer Financial Protection Bureau (CFPB) to hold financial institutions accountable and protect consumers from the types of abuses that preceded the crisis
Since its creation, this new independent watchdog has:
- Established safer national mortgage standards to better determine a borrower’s ability to repay over the long term.
- Launched new transparency requirements that clearly spell out interest rates and payments, establish caps on fees and points, and impose training qualifications on lenders.
- Subjected credit reporting agencies, debt collection agencies, and payday lenders to federal supervision for the first time.
- Taken enforcement action against companies to crack down on deceptive marketing and unreasonable fees, recovering nearly $12 billion for more than 257 million consumers who had been harmed.
- Worked with industry to give over half of Americans with credit scores free access to their scores, to help consumers improve their credit health and monitor for identity theft.
Laid the Groundwork for a Manufacturing Resurgence and Fostered U.S. Competitiveness
Launched Manufacturing USA, already up to thirteen manufacturing hubs that bring together industry, academia and government partners to bridge the gap between applied research and product development, leading the way to new advanced manufacturing capabilities
Manufacturing USA invests in U.S. leadership in emerging manufacturing technologies critical to our future competitiveness. Each manufacturing hub is designed to build U.S. leadership and regional excellence in critical emerging manufacturing technologies by bridging the gap between early research and product development; bringing together companies, universities, and other academic and training institutions, and federal agencies to co-invest in key technology areas that can encourage investment and production in the United States; and serving as a ‘teaching factory’ for workers, small businesses, and entrepreneurs looking to develop new skills or prototype new products and processes.
Established a new investment tax credit to support companies building new factories and new jobs to produce advanced, clean-energy products in the United States
Energy Department Announces $150 Million in Tax Credits to Invest in U.S. Clean Energy Manufacturing
Launched the Investing in Manufacturing Community Partnerships (IMCP) program to pool resources of multiple federal agencies in order to spur communities to develop integrated, long-term economic development plans, improving their ability to attract global manufacturers and their supply chains and create and sustain good jobs
The Investing in Manufacturing Communities Partnership (IMCP) program is an initiative designed to revolutionize the way federal agencies leverage economic development funds. It encourages communities to develop comprehensive economic development strategies that will strengthen their competitive edge for attracting global manufacturer and supply chain investments.
Formed the Advanced Manufacturing Partnership to convene industry, academia, labor, and government leaders to address the challenge of expanding advanced manufacturing across the United States
FACT SHEET: President Obama Announces New Actions to Further Strengthen U.S. Manufacturing
Created SelectUSA, the first federal government-wide investment-promotion program, which has directly facilitated billions of dollars in job-creating foreign direct investment and connected thousands of investors with state and local economic development officials
About SelectUSA
Recognizing that the competitiveness and job-generating ability of a nation is determined by its desirability as a place for businesses to operate, SelectUSA was created at the federal level to showcase the United States as the world’s premier business location and to provide easy access to federal-level programs and services related to business investment.
Launched new infrastructure finance centers at the Department of Transportation, the Environmental Protection Agency, and the Department of the Interior to increase private investment in U.S. infrastructure and encourage more public-private collaboration on transportation, water and other projects
FACT SHEET: Building a 21st Century Infrastructure: Increasing Public and Private Collaboration with the Build America Investment Initiative
Worked with the public and private sector to bring new resources into infrastructure planning and design, ensuring that local and state governments can lay the groundwork for future economic growth
Funded research in next-generation
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