6. Lessons from the Modern Era: Barack Obama’s First Term: Economy, Healthcare Reform, Etc

A Historic Inauguration in a Time of Crisis

On January 20, 2009, Barack Obama raised his right hand and placed his left on a Bible held by his wife, Michelle. Chief Justice John Roberts stood before him on the west front of the United States Capitol. Beyond them, people in winter coats crowded the National Mall to witness something no American had seen before. An African American was taking the oath as president of the United States. The Bible had last played such a role nearly 148 years earlier, when Abraham Lincoln took his first presidential oath in March 1861. Lincoln had stood on the opposite side of the Capitol as the country approached civil war. From where Obama now stood, he could look across the Mall toward the Lincoln Memorial.

A Seat at a Washington Restaurant

Obama had a striking way to explain what had changed between his father’s generation and his own. Less than sixty years earlier, he told the crowd his father might have entered a Washington restaurant and been refused service because he was Black. Now his son stood at the Capitol as the nation’s 44th president. The distance between those two experiences fit within a single lifetime. Americans old enough to remember segregated lunch counters could bring their children and grandchildren to see a Black family prepare to move into the White House. Near the end of his address, Obama chose that ordinary restaurant doorway to help listeners understand the history they had witnessed.

The Crisis Beyond the Crowd

Early in his speech, Obama had turned to the trouble awaiting Americans when the celebration ended. “Homes have been lost, jobs shed, businesses shuttered.” Each loss could set off another. A layoff could leave a family short on its mortgage payment. Families worried about losing their homes could cut back on purchases, leaving a neighborhood store with fewer customers just as its own bills came due. Obama proposed putting people to work building roads and bridges and improving the electric grid. Such projects could give workers paychecks while leaving behind something their communities needed. Carrying out that promise would require Congress to approve the spending. For someone already out of work, an urgent question remained. How soon would a job open close enough to home to take?

Two Presidents at a Helicopter

After the ceremony, Barack and Michelle Obama escorted George W. Bush and his wife, Laura, to a waiting helicopter. Earlier that day, Bush had been responsible for directing the federal response to the financial crisis and commanding American forces fighting overseas. By the time he boarded the aircraft, those duties belonged to Obama. The departing Republican president and the incoming Democratic president disagreed on how the country should be governed. Yet the outgoing president could climb aboard and leave Washington while his successor went to work. For the students watching that afternoon, the helicopter’s departure offered a final lesson in how a democracy changes hands.

The Recovery Act — How Do You Get People Working Again?

On the road to Dulles International Airport outside Washington, D.C., drivers passed a ten-foot-tall sign announcing that a runway project was “Putting America Back to Work.” Behind those words were two figures that would come to mean different things to different people. The federal recovery website credited the nearly $15 million project with creating 17 jobs. The airport authority said it had spent $10,000 of the project budget just to make and install the sign. The runway offered a way to put people to work during the Great Recession. The sign raised a question that followed the program across the country. How much should taxpayers pay to advertise the work?

How One Paycheck Could Travel

President Barack Obama signed the American Recovery and Reinvestment Act on February 17, 2009. Its estimated cost at the time was $787 billion. Congress took several approaches at once. Tax cuts left households with more money to spend. Aid to states helped school districts keep teachers on the payroll. Construction funds paid for work on roads and other public projects. Consider how a runway worker’s paycheck could travel. Part might go to a neighborhood grocer, who in turn could use the money to pay a clerk or order another delivery. Economists called that a stimulus. The hope was that spending would reach businesses and workers well beyond the original construction crew.

Who Got Credit on the Signs?

Federal highway officials encouraged states to identify Recovery Act projects so people could see where their money went. States handled the request differently. Tennessee reported paying $12,931 for 324 small signs, scarcely more than the airport paid for one. Some states skipped highway signs altogether. The argument sharpened when congressional investigators pointed to a sign design suggested for a federal Native American housing program. It included the words “Barack Obama, President.” Republican Representative Darrell Issa questioned whether taxpayers were paying to give the administration political credit. For someone driving past a construction site, the name of the funding program explained who paid for the work. Whether a president’s name belonged beside it was a separate matter.

The Job That Existed Only on Paper

At one home, federal investigators uncovered a clearer case of waste. Recovery money paid crews to insulate homes so families could spend less on heating. The records showed that workers had installed attic insulation and billed the program. Inspectors checked the attic. The insulation was missing. That gap between a paid bill and an unfinished job helps explain why judging the Recovery Act took more than counting paychecks. The Congressional Budget Office estimated that between one million and 2.1 million more people were employed in the final three months of 2009 than would have been without the law. That estimate addressed a national question about jobs. The family whose attic was still uninsulated had an equally fair question about its own home. What had the public’s money actually bought?

Solyndra — Who Checked Before Taxpayers Guaranteed $535 Million? (2009–2011)

About a week before the government closed its deal with Solyndra, a Department of Energy employee spotted two numbers that did not fit together. One forecast predicted that by 2015, a rooftop solar system would cost $2.50 per watt to install. Solyndra’s forecast put its own system at $3.19. If competing systems could deliver the same amount of power for less, why would customers pay Solyndra’s price? The employee sent three emails to two senior loan officials. According to the department’s inspector general, neither acted on the warning. In September 2009, the deal closed. Taxpayers stood behind a $535 million loan.

Why Officials Backed a Factory in California

Solyndra had developed a solar panel made of rows of thin cylinders for use on commercial rooftops. Its design avoided the polysilicon used in many competing panels. When that material was expensive, Solyndra appeared to have an advantage. The federal loan guarantee helped finance a new factory in Fremont, California, where the company hoped to produce panels in larger quantities and bring down its costs. A guarantee meant that Solyndra owed the money, but the federal government promised to cover the debt if the company could not repay it. The gamble depended on the price of competing panels and on something officials could check before signing: what Solyndra’s customers were actually willing to pay.

The Opposition — Who Would Be Paid Back First?

By late 2010, Solyndra was running short of cash. In February 2011, the Energy Department agreed to change the loan terms so private investors would put in another $75 million. The bargain gave those investors first claim on up to $75 million recovered if the company failed. Officials reasoned that keeping the factory open offered taxpayers a better chance of recovering money than shutting it down immediately. Republican investigators in the House, including Representatives Fred Upton and Cliff Stearns, challenged the department’s handling of the deal. Their objection was concrete. Taxpayers had taken a risk when the factory needed building. Why should new investors move ahead of them in the repayment line once the company was in trouble?

What the Customers Could Have Told Washington

Solyndra stopped manufacturing, began laying off about 1,100 employees, and filed for bankruptcy protection in 2011. A later inspector general investigation found that the company had given officials misleading sales information and that federal reviewers had missed opportunities to check it. Before the loan closed, a consultant asked to speak with four original customers. Solyndra referred the consultant to only two. The department also received a spreadsheet showing that two customers had bought panels below their contract prices. The loan officers who received it told investigators they had not examined it closely. At the time of its report, the inspector general expected taxpayer losses to exceed $500 million. One of the most important checks available before the signing was also one of the simplest: call the other two customers and ask how many panels they intended to buy, and at what price.

When Does a Recession End for a Family?

In June 2009, the Great Recession ended. In October, four months into the recovery, more than 15 million Americans were unemployed. How could both statements be true? The economists who date recessions look for the month when business activity across the country reaches its low point and begins to grow again. They study what factories produce, what stores sell, and what workers earn. It took until September 2010 for them to identify June 2009 as the turning point. A parent who lost a job that summer had a different date to remember. When would the next paycheck come?

Two Workers at the Same Factory

Consider two people who worked at the same factory before orders dried up. One lost Friday shifts. The other lost the job altogether. When customers began ordering again, the manager could bring back the Friday shift and fill those orders with the crew already on hand. For the first worker’s family, recovery might show up that very week as an extra day’s pay. The second worker could see trucks leaving the loading dock again and still have no reason to set an alarm for Monday morning. By April 2010, 6.8 million Americans had been out of work for at least 27 weeks. For a parent looking for a job, that was long enough to see a child bring home a fall report card and then outgrow last summer’s shoes.

The House Was Still There. Where Had the Money Gone?

Even a family that kept every paycheck could lose years of financial progress. Suppose a family owed $140,000 on a house worth $180,000. Its share of the home’s value, called equity, was $40,000. If the price fell to $145,000 while the debt stayed the same, only $5,000 in equity remained. The family could still eat breakfast in the same kitchen, yet selling the house to move for a better job had become a much harder decision. Falling home values helped drive a striking national change. Between 2007 and 2010, median family net worth fell nearly 39 percent after inflation. Net worth counts what a family owns, then subtracts what it owes.

The Paycheck After the First Paycheck

Getting hired again was one milestone. Catching up was another. A Federal Reserve survey found that in 2010, about one in nine families with debt had fallen at least two months behind on a loan payment during the previous year. For a parent starting work again, part of the first paycheck might already belong to the months spent out of work. Groceries still had to come out of what remained. Ask when the recession ended, and economists can point to June 2009. Ask a family when it finally felt secure again, and the answer might be the Friday it paid the last overdue bill and still had enough left to buy groceries for the week.

Rewriting the Rules for Wall Street

On Monday, September 15, 2008, Lehman Brothers, one of America’s largest investment banks, filed for bankruptcy. Other firms had lent it money or signed contracts with it. Suddenly, they had to figure out what those promises were worth. The danger reached beyond Wall Street. A business that counted on borrowing money to buy supplies or make payroll could face trouble when lenders grew afraid to lend. Two years later, Congress tried to answer a question the crisis had exposed. How could a giant financial company be allowed to fail without taking healthy businesses down with it? On July 21, 2010, President Barack Obama signed the Dodd–Frank Wall Street Reform and Consumer Protection Act, named for Senator Christopher Dodd and Representative Barney Frank.

A Bank Writes Its Own Living Will

One of the law’s most unusual requirements asked executives to plan for the failure of the very companies they ran. Certain large financial firms had to prepare a “living will” explaining how they could go through bankruptcy in an orderly way. Consider a bank with dozens of companies under one name. Which one owns the computers that keep payments moving? If that company closes first, can the others still operate long enough to pay what they owe? Regulators wanted executives to work through problems like those while they had time to change the plan. In a panic, even finding the person who knows the answer can cost precious hours.

What Would This House Really Cost?

For a family buying a home, financial reform came down to a question at the kitchen table. If a mortgage started with a low monthly payment, how high could that payment climb? Dodd–Frank generally required lenders to make a reasonable judgment about whether a borrower could repay a home loan. It also created the Consumer Financial Protection Bureau and directed it to simplify mortgage paperwork. The bureau tested new forms with people who would actually use them. A family comparing two offers needed to see the interest rate, fees, and possible payment increases clearly enough to decide which loan it could afford before signing.

Why Some Lawmakers Voted No

Opponents disagreed about where the law went wrong. Many Republicans worried that rules written after a Wall Street collapse would make lending more expensive at hometown banks. A small bank still had to train employees and update software, even if it made only a fraction of the loans a national bank handled. Other critics thought Congress had stopped short. They wanted the biggest banks broken into smaller companies and doubted that a written plan would persuade officials to let a financial giant fail in an emergency. Supporters argued that regulators needed the power to prepare for precisely that moment. On July 15, 2010, the Senate approved the final bill, 60 to 39. Behind that vote lay a disagreement students can weigh for themselves. Could regulators make a giant bank safe to close, or could a bank grow too large for any plan to work?

The Affordable Care Act — Who Could Get Health Insurance?

Before 2010, two neighbors looking to buy their own health insurance could fill out similar applications and get very different answers. An insurer might offer a policy to one and turn down the other because she had diabetes. Doctors already knew how to treat her illness. The question was how she would pay for years of appointments, tests, and medicine. On March 21, 2010, the U.S. House of Representatives voted 219 to 212 to approve a health reform bill the Senate had already passed. Two days later, on March 23, President Barack Obama signed the Patient Protection and Affordable Care Act, often called the ACA. For the two neighbors, the timing mattered. Some protections would begin that year. Others were nearly four years away.

What Changed for Families and Insurers?

One of the first changes reached young adults. Beginning with new plan years in the fall of 2010, plans that covered dependent children generally had to let them stay on a parent’s policy until age 26. A 22-year-old could graduate, leave campus, and take a job without health benefits while keeping that coverage. Broader protections arrived in 2014. Insurers selling new individual policies could no longer reject someone or charge more because of medical conditions such as diabetes. New individual and small-group plan also had to cover basic categories of care, including hospital stays, prescription drugs, and maternity care. Families could compare private plans through new insurance marketplaces, and eligible households could receive tax credits to help pay their monthly premiums. This website took 22 months to develop and cost the taxpayers $1.7 to 2 billion dollars.

Why Require Healthy People to Have Insurance?

The individual mandate became one of the law’s fiercest disputes. Beginning in 2014, most Americans had to carry qualifying coverage or make a payment when they filed their federal taxes. Insurance through a job, Medicare, or Medicaid could satisfy the requirement. People facing certain hardships or unaffordable premiums could qualify for exemptions. Supporters argued that if everyone could wait until an expensive diagnosis to enroll, fewer healthy people would be paying into the same pool, pushing up the price of coverage. Opponents asked a question about individual freedom. Even if buying insurance helped spread the cost of illness, should Washington be able to require a healthy person to buy it?

What Did Employers and States Have to Do?

The law also placed responsibilities on larger employers. A business with the equivalent of at least 50 full-time employees could face a payment if it failed to offer affordable coverage meeting the law’s standards and a full-time employee received a marketplace tax credit. Those employer rules began taking effect in 2015. For adults with low incomes, another route was Medicaid, the public insurance program run jointly by the states and federal government. Congress intended to expand eligibility nationwide, but a 2012 Supreme Court ruling effectively left that decision to each state. That meant two adults earning the same wages on opposite sides of a state line could have different answers to the question at the heart of the law. Could they get health insurance they could afford?

The Tea Party and the 2010 Midterm Elections

On April 15, 2009, hundreds of people stood in the rain across from the White House. Organizers had planned to unload a million tea bags in Lafayette Square, but they lacked the permit. The truck never unloaded. The protesters stayed. Holding homemade signs, they listened to speeches about bank bailouts, taxes, and federal spending. In Boston, some demonstrators dressed as Revolutionary War soldiers. In San Francisco, speakers criticized lawmakers from both major parties. The name “Tea Party” recalled the colonists who dumped tea into Boston Harbor in 1773. These Americans had chosen a peaceful way to press their case on the day federal income taxes were due.

A Dozen on One Corner, Hundreds of Thousands Nationwide

On April 15, 2009, about a dozen people gathered at a street corner in Elk Grove Village, Illinois. That same day, more than 150 gathered on the village green outside town hall in New Milford, Connecticut, and hundreds turned out in Tomball, Texas. Hundreds of rallies showed up around the United States pop-up organically in their own neighborhoods. Unlike other protests, where people are bussed in from other areas and even other states, these all focused in their local areas stressing many different topics, but mostly around the overspending and corruption inside Washington DC. Each rally had its own local concerns. In Illinois, neighbors who objected to federal bailouts also had a proposal closer to home to debate: their governor wanted to raise the state income tax. Researchers who compared attendance reports estimated that 440,000 to 810,000 people took part nationwide that day. The wide range reflects the difficulty of counting crowds spread across hundreds of communities. A dozen neighbors on a corner were as much a part of that story as the crowds in Washington.

Who Got Rescued, and Who Paid?

For many protesters, the anger began with a question of fairness. A family that borrowed more than it could repay might lose its home. Why could a financial company that took enormous risks turn to Washington for help? The bank rescues began under Republican President George W. Bush. President Barack Obama’s recovery spending gave protesters another reason to organize. Some feared that the administration’s power to direct billions of dollars invited favoritism and corruption. They also objected to congressional earmarks, which allowed lawmakers to direct money to particular projects. In 2010, activists put a concrete demand in their “Contract from America.” They wanted federal programs audited so taxpayers could see where money was being wasted, which programs duplicated one another, and what could be cut.

The Argument Over Electric Bills and Insurance Premiums

Tea Party organizers brought the debate home to two bills families recognized. One was the electric bill. Activists opposed a proposed federal limit on carbon emissions, arguing that utilities facing higher costs would pass them on to customers. The other was the health insurance bill. The Affordable Care Act called for most Americans to carry insurance beginning in 2014 and offered eligible households tax credits to help pay premiums on private plans. To many Tea Party supporters, those subsidies committed too much taxpayer money while the mandate gave Washington too much say over a family’s budget. They favored greater competition among insurers, including across state lines. Supporters of the law saw the same premium bill from another angle. What good was the chance to buy insurance if a family still could not afford it?

From the Public Square to the House Floor

The Tea Party’s first electoral test came inside the Republican Party, when primary voters chose who would appear on the November ballot. In Kentucky, Tea Party supporters backed Rand Paul over Trey Grayson, the candidate favored by Senate Republican leader Mitch McConnell. Paul won the nomination and then the Senate seat. In Delaware, Tea Party favorite Christine O’Donnell also won the Republican nomination but lost in November. Together, those races showed both the strength and the limits of the conservative wave. Activists could persuade Republican voters to challenge their own party’s leaders, but winning a primary still left a candidate with a wider electorate to convince. Nationwide, researchers found that larger Tax Day rallies helped build stronger local organizations and brought out more Republican votes in 2010. Republicans gained 63 House seats and took the majority, while Democrats retained the Senate. That changed how Washington worked. In the 2011 debt-limit negotiations, Speaker John Boehner could press President Obama for spending limits because any agreement had to pass a House where fiscal conservatives now had a stronger voice.

The IRS and Tea Party Applications — Who Gets Extra Government Scrutiny? In August 2010, an Internal Revenue Service employee sorting applications for tax-exempt status had a new instruction. An internal list called “Be On the Look Out” flagged organizations with “Tea Party” in their names for closer review. Those two words could send a file down a different path before the reviewer knew whether the group had endorsed a candidate, bought a campaign ad, or simply held meetings about taxes. For a neighborhood organization run by volunteers, that distinction mattered. A file could sit for months while its members waited to learn how the government would treat their group.

What Was the IRS Supposed to Check?

The IRS had a legitimate question to answer. An organization seeking tax exemption as a social welfare group could take positions on public issues and engage in some election campaigning, but campaigning could not be its primary activity. Consider two events a group might pay for. At one, residents debate whether their county should raise property taxes. At the other, a speaker urges those residents to elect a particular candidate. To understand what the group actually did, a reviewer could examine its events, advertisements, and spending. Its name alone answered none of those questions. Yet employees used terms including “Patriots” and “9/12,” as well as “Tea Party,” to identify applications for extra attention. Some applicants were even asked to list past and future donors, which was not a requirement of the law for any other non-profit organization. Treasury inspectors later found those requests unnecessary.

The Opposition — Twenty Months Without an Answer

For Karen Kenney of the San Fernando Valley Patriots in California, the dispute came down to what volunteers could accomplish while answering government questionnaires. Her group had organized more than 85 events in two years. Kenney later told Congress that donations fell, costs rose, and the group could afford fewer speakers, rallies, and handouts. In July 2012, after waiting 20 months, the Patriots withdrew their application. They kept meeting. In June 2013, Kenney took their objections to the House Ways and Means Committee. Her account showed why applicants protested even when the IRS had never formally turned them down. A group could spend nearly two years seeking a decision and finally give up without receiving one.

What the Watchdog Found

When Treasury’s inspector general reported publicly in 2013, the figures revealed what had happened during the preceding years. Among 296 applications reviewed for possible campaign activity, 108 had been approved, 28 had been withdrawn, and 160 remained open as of December 17, 2012. None had been denied, they just would not let them be recognized as a non-profit, in order to raise funds from ordinary Americans. Some applicants had waited more than three years. The audit traced the problem to inappropriate screening rules and ineffective IRS management.

The Supreme Court Weighs In on Healthcare

Suppose you were healthy, paid your own doctor bills, and decided to go another year without health insurance. Could Congress require you to buy a policy anyway? In 2012, that question reached the Supreme Court in National Federation of Independent Business v. Sebelius. Two years earlier, President Barack Obama had signed the Affordable Care Act, commonly called Obamacare. Beginning in 2014, most Americans would have to carry qualifying health coverage or make a payment to the federal government unless they qualified for an exemption. The law called this rule the individual mandate. Its challengers argued that Congress had crossed a constitutional line by telling people they had to buy something.

A Hospital Bill Nobody Planned For

The Obama administration defended the mandate by pointing to a hospital emergency room. A healthy person could skip insurance for years and then need expensive treatment after a single accident. If the patient could not pay, the hospital might absorb the loss or pass some of the cost on to others. The administration argued that these decisions affected healthcare commerce across state lines, which the Constitution gives Congress power to regulate. Chief Justice John Roberts saw a limit. Congress could set rules for companies selling insurance and people buying it. In his view, the power to regulate a market did not also give Congress the power to order someone to enter it. On that point, four other justices reached the same conclusion.

The Vote That Turned on a Tax

Why, then, did Roberts vote to uphold the mandate? He looked at what happened to someone who went uninsured. Congress called the payment a “penalty,” but the IRS collected it through the tax system. The amount depended partly on income, and going without coverage carried no criminal punishment. A person could lawfully remain uninsured and pay a steep fee for not signing up for health insurance, including those that felt it was against their beliefs. To Roberts, that made the payment a tax Congress had constitutional authority to impose. Four dissenting justices argued that Congress had deliberately written a command backed by a penalty and that the Court had no business recasting it. On June 28, 2012, Roberts joined four other justices to uphold the provision, 5–4. His decisive vote preserved the mandate because Congress could tax the choice to go uninsured.

The Choice Left to the States

The same ruling gave states a choice that Congress had tried to settle for them. The law called for expanding Medicaid, the joint federal and state health insurance program for people with limited incomes. A state that refused the expansion risked losing the federal money it already relied on to cover people under its existing program. The Court found that threat too coercive. Washington could offer new money for broader coverage, but states could decline the offer and keep their existing Medicaid funding. For two adults earning the same wages on opposite sides of a state line, the consequence was real. One might qualify for Medicaid under the expansion while the other remained ineligible. The justices’ debate over federal power could reach all the way to a patient handing over an insurance card at a doctor’s office.

Operation Fast and Furious — What Happens When an Administration Lies

On the night of December 14, 2010, U.S. Border Patrol Agent Brian Terry was fatally shot during an encounter with armed men near Rio Rico, Arizona. Investigators recovered two rifles at the scene. Their serial numbers led back to a buyer already under investigation by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, known as ATF. The evidence could not establish whether either rifle had fired the fatal shot. But the trace raised a question that Terry’s family, federal agents, and members of Congress wanted answered. If investigators had known about the buyer, how had those rifles gotten this far?

The Opposition Inside the Agency

Operation Fast and Furious began in Arizona in 2009. ATF investigators were watching suspected “straw purchasers,” people who buy guns on someone else’s behalf while claiming to be the actual buyer. Supervisors hoped that delaying arrests and seizures would help identify the leaders supplying weapons to Mexico. Some agents saw a dangerous flaw. A dealer might alert ATF to a sale, and agents might see the buyer leave with the guns. Once the buyer passed them to someone else, however, agents could lose track of them entirely. Agent John Dodson and other whistleblowers challenged the tactic. Their objection was practical and urgent: who would protect the people on either side of the border while investigators waited to build a bigger case?

The Letter Congress Had to Wait Ten Months to See Corrected

After hearing from whistleblowers, Senator Chuck Grassley of Iowa asked the Justice Department about the operation. On February 4, 2011, the department sent him a written response denying that ATF had knowingly allowed guns from illegal purchases to reach Mexico. It assured him that agents made every effort to intercept illegally purchased weapons. That answer conflicted with what agents described under questioning. Grassley and House investigators kept asking for documents they could compare with the testimony. On December 2, nearly ten months after sending the letter, the department formally withdrew it because it contained inaccuracies. By then Congress had two investigations on its hands: how the guns got away and how an agency’s account reached a senator without anyone adequately checking it.

What the House Vote Decided

On June 28, 2012, the House voted 255–67 to hold Attorney General Eric Holder in contempt of Congress for refusing to comply fully with a subpoena, a formal demand for records. The vote concerned documents Congress wanted to examine. A separate inspector general investigation traced responsibility for the operation itself. It documented serious failures in judgment and oversight and found no evidence that Holder knew of the operation or its tactics before January 31, 2011. Those findings show why the records mattered. The serial numbers established where two rifles had been purchased. Agents’ testimony explained why they objected. Dated letters and internal records helped establish which officials knew what, when they knew it, and where someone with the power to intervene had missed the chance.

“Cling to Guns or Religion”: Small-Town America and the Divide Over Washington On April 6, 2008, Barack Obama was in San Francisco, talking to campaign donors about towns in Pennsylvania where factory jobs had disappeared. He was still a senator seeking the Democratic nomination. His point was that people had heard politicians promise to bring jobs back for years, and they had good reason to doubt the next promise. Then he explained how those disappointments shaped voters. People “get bitter,” he said, and “they cling to guns or religion.” He went on to mention resentment toward opposition to immigration or trade. Within days, voters in Pennsylvania were hearing what a man who wanted to be their president had said about them across the country.

The Opposition — Who Gets to Explain a Neighbor’s Beliefs?

One of the sharpest objections came from a fellow Democrat. Speaking in Pittsburgh, Hillary Clinton challenged the idea that economic frustration explained people’s commitments to faith or firearms. At a debate in Philadelphia, she spoke about her grandfather, who had gone to work in a Scranton lace mill at age eleven. Her objection turned on a distinction a family in any mill town could recognize. A worker could be furious about a plant closing and still attend the same church or hunt with the same relatives as when the mill was hiring. Obama acknowledged that he had chosen his words poorly. He said he understood why people trusted traditions that had sustained them more than politicians who had let them down. The disagreement was partly about who had earned the right to speak for those families.

When the Disagreement Became Law

During Obama’s first term, the question of trust took on practical consequences. The Affordable Care Act promised help to people who could be denied insurance because they were already sick, but it also raised the price of insurance. It also called for most Americans to carry coverage or make a payment unless they qualified for an exemption. Supporters asked what freedom a family really had if no insurer would sell it a policy it could afford. Tea Party opponents asked what freedom a family retained if Washington could require it to buy one. At local rallies and in the 2010 elections, activists pressed Republican candidates to repeal the law. Two neighbors could worry about the very same doctor’s bill and disagree deeply over who should decide how to pay it.

How Wide Had the Divide Become?

In 2012, the Pew Research Center compared answers to 48 political-values questions it had tracked since 1987. The average gap between Republicans and Democrats had grown from 10 percentage points to 18. Some of the largest disagreements between Obama and Mitt Romney supporters concerned how much responsibility government should take for the economy. That long record puts the fundraiser in perspective. The divide had been widening for years before Obama spoke. What made his remark memorable was how quickly a debate about lost factory jobs became a dispute over respect. Asking a voter what happened when the mill closed invites that person to tell a story. Telling the voter why he goes to church presumes to know the answer.

Obama, Romney, and the Voters’ Verdict in 2012

Five months before Americans chose their next president, one vote on the Supreme Court changed what was at stake. On June 28, 2012, Chief Justice John Roberts cast the decisive vote in a 5–4 ruling that upheld a central provision of President Barack Obama’s healthcare law. Known as the individual mandate, it called for most Americans to carry health insurance beginning in 2014 or pay a penalty unless they qualified for an exemption. Roberts concluded that Congress’s power to regulate commerce did not allow it to order people to buy insurance. But a person could legally go uninsured and make a payment to the IRS. Because that payment functioned as a tax, Roberts concluded that Congress had the constitutional power to impose it. The ruling settled whether the mandate could stand. Voters still had to decide whether to reelect the president who had signed it.

The Governor Who Had Signed a Mandate of His Own

When Obama and Republican challenger Mitt Romney met on a Denver debate stage on October 3, Obama pointed to an unexpected source for his healthcare plan. As governor of Massachusetts, Romney had signed a law requiring most residents to carry insurance. Obama praised his opponent for working with Democrats to extend coverage and asked why families elsewhere should go without similar protections. Romney drew a distinction that mattered to him. Massachusetts voters could hold their own lawmakers accountable for a plan designed for their state. Other states, he argued, deserved the freedom to choose a different approach. He pledged to seek repeal of the federal law. The two men had backed similar ideas and still disagreed over who should make the decision.

Whose Plan Would Bring Back Jobs?

Healthcare was only one decision on the ballot. Obama had taken office during the Great Recession. By 2012, he could point to businesses hiring again, while Romney could point to families still waiting for steady work. In Denver, Romney recounted meeting a woman whose husband had lost his job and whose family had lost its home. He argued that lower tax rates and fewer regulatory burdens would help businesses expand and hire. Obama argued for investing in education, job training, and American energy, and for asking higher-income households to contribute more toward reducing the deficit. A voter could agree that the economy was improving and still have a hard choice to make. Which plan offered the better chance that the next job opening would come to the voter’s own town?

What Americans Decided on November 6

Florida shows how close the contest could look from inside a voting booth. Out of nearly 8.5 million presidential votes cast there, Obama finished about 74,000 ahead of Romney and won all 29 of the state’s electoral votes. Nationwide, Obama won 332 electoral votes to Romney’s 206, clearing the 270 needed for a second term. Republicans kept the House of Representatives, while Democrats retained the Senate. The outcome had a concrete consequence for healthcare. Romney would have no opportunity as president to pursue repeal, and the Obama administration could continue preparing for the insurance marketplaces and coverage requirement scheduled for 2014. In June, one justice’s vote had helped keep the law in place. In November, voters decided who would carry it out.

America’s Recovery in a Changing World — The Obama Presidency, 2009–2012

London, 2009 — What If a Customer Overseas Couldn’t Get a Loan?

On April 2, 2009, President Barack Obama met other world leaders in London, six weeks after signing the American Recovery and Reinvestment Act. The American law could put a road crew to work, but it could do little for a factory whose overseas customers had stopped placing orders. Even a buyer who wanted American machinery might struggle to find a bank willing to finance the purchase. In London, leaders of the Group of Twenty agreed to provide more than $1 trillion in additional resources through international financial institutions and financing for trade. For an American manufacturer, the purpose was concrete. A loan to a customer an ocean away could mean another order for the factory back home.

The H1N1 Pandemic, 2009–2010 — A Vaccine Arrives Behind the Virus

In April 2009, laboratory tests identified a new strain of influenza in two California children who lived about 130 miles apart. The virus, called H1N1, spread around the world. While Congress debated who should have health insurance, the Obama administration faced a different healthcare problem. How could it get a new vaccine to people before they caught the flu? In the United States, vaccine supplies became widely available in late November, after the autumn wave of illness had peaked. The CDC later estimated that about 61 million Americans caught the virus during the pandemic’s first year. For families, the distinction was practical. An insurance card could help pay for a visit, but even an insured patient had to wait if the clinic had no vaccine.

Japan, 2011 — An Earthquake Stops a Louisiana Assembly Line

On March 11, 2011, a powerful earthquake struck off Japan’s coast and unleashed a devastating tsunami. Workers in Shreveport, Louisiana, felt the economic effects within days. General Motors had to suspend production at its assembly plant there for a week because it could not get parts from Japan. The Louisiana factory was intact, its workers knew their jobs, and the missing parts made it impossible to finish the vehicles. For Obama, who had made the revival of American manufacturing a measure of recovery, the shutdown showed how quickly events abroad could interrupt progress at home. For a worker in Shreveport, that international connection showed up on the shift schedule.

Europe, 2012 — A Greek Election Enters the American Campaign

In June 2012, as Obama campaigned for reelection against Mitt Romney, he held a press conference about the American economy and began by talking about Europe. Greece was struggling with its debts, its voters were about to elect a new parliament, and its future in the euro currency union was uncertain. Obama explained why Americans had a stake. Europe was a major customer for American goods, and a deeper European recession could mean fewer orders and less hiring here. He urged European leaders to address their debts while giving businesses and workers room to recover. A Romney economic adviser criticized that advice, bringing a European dispute into the American campaign. Voters on both sides of the Atlantic faced a version of the same question. How quickly could a government cut its debts when people were still trying to get back to work?

The People Who Shaped Barack Obama’s First Term:  Healthcare Reform, Etc

Barack Obama — A President Facing a Recession

Before entering the White House, Barack Obama worked as a community organizer in Chicago, taught constitutional law, and represented Illinois in the U.S. Senate. On January 20, 2009, he became the first African American president. Families were losing jobs and homes, and one of his first decisions was to press Congress for the Recovery Act, which combined tax relief with spending intended to put people back to work. He also chose to pursue health insurance reform while the economy was still weak. That decision gave him his signature law and gave his opponents an issue around which to organize.

Christina Romer — The Historian Asked to Help Prevent Another Depression

As an economics professor at the University of California, Berkeley, Christina Romer studied why the Great Depression had been so severe and how recovery had begun. That research brought her to the attention of Obama’s transition team. As chair of his Council of Economic Advisers, she helped estimate how many jobs the recovery plan might create or preserve. Her task involved a puzzle students can appreciate. A school could count the teachers it employed, but how could anyone count the teachers it would have laid off without federal aid? Her work gave policymakers a way to estimate that difference, even when an exact count was impossible.

Ben Bernanke — The Central Banker Who Studied Bank Failures

Ben Bernanke grew up in Dillon, South Carolina, and became an economist who studied how failing banks had deepened the Great Depression. President George W. Bush appointed him chair of the Federal Reserve, and Obama nominated him for a second term. While Congress debated spending, Bernanke led the nation’s central bank in buying large amounts of long-term government bonds and mortgage-related investments. The aim was to lower borrowing costs. For a family trying to refinance a home or a business deciding whether to expand, an interest rate could matter as much as a vote in Washington.

Nancy Pelosi — The Speaker Who Had to Find the Votes

Nancy Pelosi grew up in Baltimore, where her father served as mayor. She became a Democratic organizer in California, won election to Congress in 1987, and in 2007 became the first woman to serve as Speaker of the House. Her experience counting votes proved decisive in March 2010. The Senate had passed a healthcare bill that some House Democrats wanted to change. Pelosi helped persuade enough of them to accept it and pursue revisions separately. The bill passed 219–212. Obama signed the Affordable Care Act two days later, but first Pelosi had to assemble a majority willing to put its names on the record.

John Boehner — The Speaker Across the Bargaining Table

John Boehner grew up in a family of twelve children in Ohio, mopped floors at his family’s tavern, and became a businessman before entering politics. After Republicans won control of the House in the Tea Party wave of 2010, he succeeded Pelosi as Speaker. During the 2011 fight over the federal borrowing limit, Boehner pressed for spending restraints while negotiating with Obama. He also had to persuade members of his own party to accept a deal. His rise changed the terms of Obama’s presidency. The president now faced a House majority whose voters had sent it to Washington largely to challenge his approach to spending.

John Roberts — The Chief Justice Whose Reasoning Preserved the Health Law

A lawyer who had argued cases before the Supreme Court, John Roberts became chief justice in 2005 under President Bush. In June 2012, he cast the decisive vote to uphold the Affordable Care Act’s individual mandate. Roberts concluded that Congress’s power to regulate commerce did not let it order someone to buy insurance. Yet an uninsured person could lawfully pay the IRS instead, and Roberts concluded that Congress could impose that payment as a tax. His distinction determined whether a central part of Obama’s most contested law would survive.

Mitt Romney — The Challenger Who Had Signed a Health Law Himself

Mitt Romney brought experience in business and as governor of Massachusetts to the 2012 Republican presidential campaign. He argued that lower tax rates and fewer regulations would help employers hire. His sharpest exchange with Obama concerned a law Romney himself had signed. Massachusetts had required most residents to carry health insurance. Obama pointed to it as evidence that reform could work. Romney answered that Massachusetts had the right to choose its own approach and other states deserved the same freedom. Obama won reelection, 332 electoral votes to 206, but Romney had put a lasting question before voters. Which decisions about a family’s healthcare belong in Washington, and which belong closer to home?

Life Lessons from the Barack Obama Presidency: Healthcare Reform, Etc.

Ask What a Number Can Tell You

The Great Recession ended in June 2009. Four months later, unemployment reached 10 percent. Both statements were true. A factory could fill new orders by giving its workers longer shifts before hiring back anyone it had laid off. Its production figures would improve while former employees were still looking for work. The next time someone says things are getting better or worse, ask what they measured and whose experience the number might hide. A class average can rise while several students are falling behind. Knowing both facts gives a teacher a better idea of who needs help.

Check Whether a Good Intention Became a Good Result

The Recovery Act paid crews to insulate homes so families could stay warm and spend less on heat. At one house, the paperwork showed that workers had installed attic insulation and billed the program. An inspector checked the attic. The insulation was missing. That discovery mattered to the family, but one empty attic could not tell investigators how well the whole program worked. It gave them a reason to inspect more homes and find out how often the records matched the work. You can use the same habit after a school fundraiser. Count the money, then ask the people you meant to help what actually reached them.

Explain the Other Side’s Reasoning Fairly

In a 2012 debate, Barack Obama praised an unlikely person for expanding health insurance coverage: his Republican opponent, Mitt Romney. As governor, Romney had signed a Massachusetts law requiring most residents to carry insurance. Obama saw a model that could help families nationwide. Romney saw a decision Massachusetts had the right to make for itself, just as other states had the right to choose differently. To understand their disagreement, a student following the debate had to ask two questions. Would the policy help people, and who had the authority to adopt it? Before arguing your side, try explaining the other person’s answer in words they would recognize. You may discover exactly where your disagreement begins.

Know Who Can Act on Your Concern

On Tax Day in 2009, about a dozen protesters gathered at a street corner in Elk Grove Village, Illinois. Some objected to federal bailouts. Others also opposed their governor’s proposed state income tax increase. Neighbors could stand at the same corner, yet their concerns called for action by different elected officials. Tea Party organizers later asked congressional candidates to make specific commitments on spending, and researchers found that stronger local rallies helped bring out more Republican votes in 2010. There is a lesson here even for students too young to vote. If the school crossing near your home feels unsafe, start by finding out who controls that stretch of road. Then bring that person a clear account of the problem and a change you can ask them to make.

Vocabulary for the Barack Obama Presidency: Healthcare Reform

1. Recession

Definition — A period when economic activity declines across much of a country, usually for several months or longer.

Sample sentence — When Barack Obama took office in January 2009, the United States was in a recession and many employers were cutting jobs.

2. Economic recovery

Definition — The period after a recession when the economy begins growing again.

Sample sentence — The economic recovery began in June 2009, but many families waited much longer for a steady paycheck.

3. Unemployment rate

Definition — The percentage of the labor force made up of people who are out of work, available to work, and generally looking for a job.

Sample sentence — In October 2009, the unemployment rate reached 10 percent, meaning about one in ten people in the labor force was unemployed.

4. Economic stimulus

Definition — A government effort to increase spending and hiring during a slowdown, often through tax cuts or public projects.

Sample sentence — Under the 2009 Recovery Act, repairing a runway served as economic stimulus by giving workers paychecks they could spend at local businesses.

5. Financial regulation

Definition — A rule governing how banks, lenders, or other financial companies operate.

Sample sentence — One financial regulation in the 2010 Dodd–Frank Act required certain large financial companies to plan for how they could go through bankruptcy.

6. Budget deficit

Definition — The amount by which a government’s spending exceeds the money it collects during a given period, usually one year.

Sample sentence — Voters worried about the federal budget deficit asked candidates which spending programs they would cut.

7. National debt

Definition — The total amount of money the federal government owes from borrowing over time.

Sample sentence — Even if the yearly budget deficit shrinks, the national debt can keep growing because the government is still borrowing.

8. Health insurance premium

Definition — The amount a person, family, or employer pays regularly to keep a health insurance plan in effect.

Sample sentence — The family paid its monthly premium even in months when nobody visited a doctor.

9. Preexisting condition

Definition — A health problem someone already has before a new insurance plan begins.

Sample sentence — For a child who already had asthma when her family applied for a new plan, asthma was a preexisting condition.

10. Subsidy

Definition — Financial help from the government that covers part of the cost of a good or service.

Sample sentence — The Affordable Care Act included a subsidy that eligible families could use to lower their monthly insurance premiums beginning in 2014.

11. Individual mandate

Definition — The Affordable Care Act’s requirement, scheduled to begin in 2014, that most people have qualifying health insurance or make a payment unless they qualified for an exemption.

Sample sentence — In 2012, the Supreme Court upheld the individual mandate because the payment for going uninsured could be treated as a tax.

12. Judicial review

Definition — The power of courts to decide whether a law or government action follows the Constitution.

Sample sentence — The Supreme Court exercised judicial review when it considered whether Congress had the power to impose the healthcare payment.

13. Grassroots movement

Definition — A political or social effort in which people organize in their own communities to influence public decisions.

Sample sentence — Tea Party supporters built a grassroots movement by holding local rallies and asking candidates to commit to spending limits.

14. Midterm election

Definition — A congressional election held halfway through a president’s four-year term, when all House seats and about one-third of Senate seats are up for election.

Sample sentence — In the 2010 midterm election, Republicans won control of the House of Representatives while Democrats retained the Senate.

15. Divided government

Definition — A situation in which the president’s party does not control both chambers of Congress.

Sample sentence — Under divided government in 2011, President Obama and the Republican-led House had to negotiate over federal spending.

Activities to Try While Learning About the Barack Obama Presidency

Follow the Recovery Dollars

Recommended Age: 9–14 years

Activity Description: Students act as town officials choosing how to spend a fictional recovery grant, then switch roles and inspect what taxpayers received. Allow 20 minutes.

Objective: Distinguish between spending money, supporting jobs, and delivering the work a community paid for.

Materials: Ten coins, paper, and three project cards labeled “Repair a bridge — 6 coins,” “Insulate four homes — 4 coins,” and “Keep a classroom teacher for one term — 4 coins.” The costs are invented for this activity.

Instructions: Give students ten coins. Have them choose projects, explain one trade-off, and write down what residents should receive. Then give them an inspection problem for one project they chose. The bridge invoice says all repairs are complete, but one railing is missing. The insulation bill lists four homes, but an inspector finds insulation in only three. The teacher is still in the classroom, but the town claims it created a new position. Ask students what they can verify, what record they would request, and what they would tell residents.

Learning Outcome: Students can identify an unfinished job, explain the difference between creating and preserving a position, or propose a fair way to check a public claim.

One Voter, Two Ballots

Recommended Age: 12–18 years

Activity Description: Students step into the voting booth in 2010 and again in 2012 to see how Americans could change control of Congress and then return the president to office. Allow 25 minutes.

Objective: Distinguish a midterm election from a presidential election and explain how voters can produce divided government.

Materials: Two slips per student, a pencil, and three headings on a sheet of paper: “President,” “House,” and “Senate.”

Instructions: Label the first slip “2010 House ballot.” Ask students to write one question a voter concerned about federal spending or unemployment might ask a congressional candidate. Reveal the result: Republicans gained 63 House seats, Democrats retained the Senate, and Obama still had two years left in his term. Label the second slip “2012 presidential ballot.” Have students write one question they would put to both Obama and Romney about jobs or health insurance. Reveal the result: Obama won reelection, Republicans kept the House, and Democrats kept the Senate. Under the three headings, have students identify who would need to agree to enact an ordinary spending bill.

Learning Outcome: Students can explain how a president can win reelection while the opposing party retains the power to block legislation in the House.