President gives speech in Illinois and says Washington's 'gridlock, inaction and wilful indifference' is harming recovery
Barack Obama has called for an end to the "gridlock, inaction and wilful indifference" he said was plaguing Washington, hampering the economic recovery and increasing inequality.
In a set-piece speech in Illinois on Wednesday, Obama said that reversing economic trends that have resulted in a growing gap between rich and poor would be his "highest priority" for the remainder of his presidency.
Calling on Republicans to overcome "short-term politics" ahead of crucial budgetary negotiations set to begin after the summer, Obama said it was essential for the country "to break through the tendency in Washington to careen from crisis to crisis".
"With an endless parade of distractions, political posturing and phony scandals, Washington has taken its eye off the ball," he said. "And I am here to say: this needs to stop. Short-term thinking and stale debates are not what this moment requires."
He painted a broadly positive picture of his US economy, saying America had "fought its way back" from the deep recession that ended in 2009 with continued growth and new jobs.
However, he said progress had been marred by a "winner-takes-all economy" that has disproportionately benefited the richest Americans, and said that future progress was dependent upon support from Republicans, who have so far disagreed vehemently over economic policy.
"Even though our businesses are creating new jobs and have broken record profits, nearly all the income gains of the past 10 years have continued to flow to the top 1%," he said. "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."
He added: "This growing inequality isn't just morally wrong; it's bad economics. When middle-class families have less to spend, guess what? 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 America."
The address, at Knox College in Illinois, where he gave his first speech after becoming a US senator in 2005, kickstarted a series of speeches on the economy.
Obama's speaking tour has been heavily promoted by the White House in recent days. Senior administration officials billed the address as a decisive intervention to regain the political agenda and to put the focus on rebuilding the economy – the priority they say got the president re-elected.
Obama was scheduled to immediately fly to Missouri to deliver the same message, and will give a third address in Florida on Thursday. Similar speeches are planned in the months to come, as the White House tries to set out its stall before congressional negotiations over tax and spending priorities – and whether to raise the debt ceiling – in September.
To loud applause from the audience of supporters in Illinois, Obama said: "As Washington prepares to enter another budget debate, the stakes for our middle class could not be higher".
Austan Goolsbee, an adviser to Obama when he gave his speech at Knox in 2005, said his latest remarks signalled a change in strategy ahead "potentially epic battle" with Republicans in Congress over fiscal policy.
Goolsbee, who chaired the White House's council of economic advisors until two years ago, told the Guardian that rather investing in negotiations on Capitol Hill, the approach taken in previous years, Obama was taking his economic argument to the country.
"Obama is not trying to go down the route of trying to persuade Congress to pass a bill, because in this environment that approach doesn't work," he said. He described the new strategy as: "go to the American people, convince them that your vision is superior".
There were no new policy proposals in the speech, which repackaged previously announced proposals for investment in infrastructure and education, tax reform and an increase to the minimum wage.
Critics have pointed out is Obama's ninth attempt to refocus the debate on the economy. He has repeatedly failed to forge bipartisan support in Congress, particularly in the Republican-controlled House of Representatives, where there is a strong appetite for deeper spending cuts.
Failure to reach agreement over budgets has triggered a series of automatic spending cuts to social and defence programmes, which could be repeated in the next financial year.
"I believe there are members of both parties who understand what's at stake, and I will welcome ideas from anyone from across the political spectrum," Obama said. "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, I'll use it."
In Washington, Republicans derided the speech. "If Washington Democrats were really serious about turning the economy around, they'd be working collaboratively with Republicans to do just that, instead of just sitting on the sidelines and waiting to take their cues from the endless political road-shows the president cooks up whenever he feels like changing the topic," said Senate minority leader Mitch McConnell.
The US economy has grown steadily but modestly over the last four years, and the deficit has also come down after spending cuts and tax increases. Opinion polls indicate growing public confidence over state of the economy.
However, some analysts say the growth has not translated into a significant enough expansion of the jobs market.
Obama blamed his opponents on Capitol Hill the failure to provide the boost to the middle classes that he said was needed. "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 we've seen these past few years – our economy will be stronger," he said.
He added that the economy would "probably muddle along" without significant agreement in Washington. "Our economy will grow, though slower than it should; new businesses will form, and unemployment will keep ticking down," he said.
"But if that's 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."