Obama’s hope and change hard-earned in Michigan

Jonathan Oosting
Detroit News Lansing Bureau

Barack Obama promised hope and change in 2008, themes that captured the imagination of Michigan voters and helped propel him to the White House as the nation’s first African-American president.

Eight years later as Obama prepares to leave office, there are some signs of hope and change in Michigan, which is in the midst of a slow but sustained economic recovery after suffering more than most states during the Great Recession. But it has not come quick or easy.

Republicans who control state government also claim credit for the comeback just like Obama. But the Democratic president left a lasting mark on Michigan by helping automakers avoid collapse, deploying aid and staff to the struggling city of Detroit, drinking filtered water in Flint and helping craft a controversial health care law that has helped hundreds of thousands of residents obtain coverage but didn’t control costs as envisioned.

“He came in at one of the worst times in the history of the country economically — second only to the Great Depression — and he lifted us up with a tremendous amount of hard work,” said Sen. Debbie Stabenow, D-Lansing.

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“It would have been better, he could have gotten further, if our Republican colleagues wanted to work with him. I think that they determined he had run on hope and change, and if they could stop things from changing people would lose hope.”

Obama’s status as the first black president remains a huge source of pride for supporters of all colors.

“At this point in our lives, we had the opportunity to have a black man as the president of the United States and show our young black men what they can be,” said Detroit resident Albert Jones, 67. “Oh, my goodness. It just opened the doors to so many opportunities for our young kids.”

Even critics agree on that front.

“From an African-American perspective, he gave us something to aspire towards and realize that in America anything is definitely possible ... but in terms of policy, he really did not do what he intended to do,” said Wayne Bradley, who helped open a Michigan Republican Party office in Detroit after Obama won re-election in 2012.

“I just think at the end of the day there were a lot of unfulfilled promises. In terms of our health care, I think he was wrong. A lot of his legacy is going to be written away by things President-Elect (Donald) Trump is planning on doing.”

Deploying aid to Detroit

Supporters say Obama played a significant role in Detroit’s burgeoning comeback. His administration first deployed full-time staff to Detroit in 2011, before the city’s 2013 bankruptcy filing, as part of its “Strong Cities, Strong Communities” initiative and maintains a presence in City Hall to this day.

The federal team has provided Detroit leaders with technical assistance or helped secure resources for numerous projects, including demolition of more than 10,000 blighted properties, no-interest home improvement loans, streetlight replacements, new public buses and development of the M-1 Rail line, as outlined in a December report.

Tara McGuinness, a senior adviser for Obama’s Office of Management and Budget and executive director of the community solutions task force, called Detroit “the flagship” for a partnership model the administration expanded to other distressed cities.

“At its essence, it requires local leadership and vision and federal partnership in a way that is a joint effort,” McGuinness said. “And when you have that, like we had in Detroit, it can make a tremendous impact.”

Obama and Vice President Joe Biden “were enormously supportive, and I think they were supportive for the right reasons,” Mayor Mike Duggan said. “We came to them with some initiatives, which they supported us on, and they really worked well.”

While Duggan’s demolition program was recently suspended by the U.S. Treasury Department to address potential “mistakes,” its aggressive pace was facilitated by $260 million in funding made available through the Hardest Hit foreclosure prevention fund. It was a source first identified by the federal team working in Detroit, according to the administration report.

The demolition program remains under federal investigation.

One of the most visible signs of progress in Detroit has been installation of 65,000 new streetlights, making it the largest city in the country with 100 percent LED public lighting. The U.S. Energy Department helped convince local and state officials to use the energy-efficient diodes.

The change was “so dramatic in such a short period of time and took all parties working together under Mayor Duggan’s leadership,” McGuinness said.

Detroit won a $25 million federal grant to upgrade its bus fleet in 2015, and the Obama administration said its federal team helped the city “piggyback” on pending orders from other municipalities to speed up the purchase of 80 new buses by mid-2016, a process that can typically take years.

But other leaders in Metro Detroit argue that the president played favorites.

Obama “didn’t do a damn thing for Oakland County,” said outspoken Executive L. Brooks Patterson, a Republican whose county remains home to FCA-US LLC, the automaker formerly known as Chrysler. “He was too busy giving buses to Mike (Duggan).”

Auto recovery

Obama began building his Michigan legacy soon after taking office — or even before, according to some accounts. His economic team “quietly urged” then-President George W. Bush to help save General Motors and Chrysler from financial collapse in late 2008, former senior adviser David Axelrod wrote in a 2015 book. Bush ended up giving $25 billion to automakers and their suppliers during the final weeks of his presidency.

Once in the White House, Obama quickly appointed an auto task force and soon significantly expanded the industry bailout. His administration eventually loaned the automakers another $55 billion, assuming shares in both companies and guiding them through expedited bankruptcies in mid-2009 that largely benefited union workers at the expense of bondholders.

The collapse of GM and Chrysler would have cost the country 2.6 million jobs in 2009 and 1.5 million jobs in 2010, according to a post-bailout analysis by the Center for Automotive Research in Ann Arbor. The federal government lost $9.26 billion on the bailout, but CAR projected industry collapse would have cost the government much more in higher transfer payments, lower Social Security receipts and lost income taxes.

“Chrysler probably could have gone away without too much impact, but had GM gone down it would have taken a number of suppliers out, which would have affected not only the entire industry but taken what we think of as the Great Recession into depression, too,” said Dave Cole, CAR’s chair emeritus.

Still, the bailout “was not done as effectively and efficiently as it could have been done,” Cole said. Obama’s team “had very little knowledge of the complexity and importance of the auto industry” and “really kind of stiffed investors,” he said, souring lenders on automakers and suppliers.

Michigan’s economic gains

Michigan’s economy has grown under Obama, who took office in 2009. But the rebound also occurred around the same time Republicans took full control of state government two years later and rewrote the tax code to slash business taxes as well as eliminate various exemptions and credits for individuals.

Michigan had 11.2 percent unemployment when Obama was sworn in, a rate that has since plummeted to 5 percent. The state has added more than 410,000 private-sector jobs over the past eight years, according to the U.S. Bureau of Labor Statistics.

Those gains were driven by the auto industry and manufacturing, which accounted for more than 130,000 of the new Michigan jobs but still employs fewer people than prior to the Great Recession.

“Michigan’s economy didn’t recover until Rick Snyder took over as governor,” said state GOP spokesperson Sarah Anderson. “The economic recovery in Michigan is a direct result of Republican policies and Republican leadership. President Obama’s legacy is that of one failed promise after another.”

But the state’s resurgence has not occurred in a vacuum, said Michigan Democratic Party Chairman Brandon Dillon. The national unemployment rate has dropped from 7.8 percent in early 2009 to 4.7 percent, slightly lower than the state’s rate, he said.

“It is clear the economy in Michigan has benefited from the policies of President Obama,” Dillon said. “Republicans in Michigan might have some credibility to make that claim if the economy in Michigan was somehow growing while the rest of the country was not.”

Affordable Care Act

Obama signed the Affordable Care Act in March 2010 with then-U.S. Rep. John Dingell at his side. The Dearborn Democrat spent more than five decades fighting for greater federal involvement in health care and an expansion of medical access, which he called a human right.

“If it were not for Obamacare, I wouldn’t be able to get the treatments that I get,” said Detroiter Clemetine Jones, 67, who called herself a cancer survivor. “I’m looking forward to continuing Obamacare. It’s his legacy.

“I’m missing him already.”

But the Affordable Care Act has not proven affordable for all Michigan residents, especially those who earn too much to qualify for income-based premium tax credits or can’t stomach large deductibles. It is now on the chopping block as Trump and the Republican-led Congress consider repeal.

The sticker price for individual health plans sold through Michigan’s online exchange jumped an average of 16.7 percent from 2015 to 2016, and the number of plans offered declined slightly.

“In general, we are getting less for our health care dollars since the ACA became law,” said Jack McHugh of the free-market Mackinac Center for Public Policy.

But at least one portion of the controversial law — the state’s Medicaid expansion plan known as Healthy Michigan — has proven unexpectedly popular here. It quickly topped initial enrollment projections and now provides health care coverage to nearly 640,000 low-income Michiganians.

Snyder convinced the GOP-led state Legislature to accept federal funding to expand Medicaid access and remains a vocal champion of the law he signed in 2013, also with Dingell at his side.

Medicaid expansion has been “strongly net positive for the state,” said Allan Baumgarten, an independent Minneapolis-based analyst who has followed Michigan’s health care market since 1997.

He cited research by state agencies and the University of Michigan showing “savings to the state general fund in areas like mental health and corrections health will more than offset the additional costs of the phased-in state share” projected to approach $400 million by 2021.

“In addition, providers, especially safety net hospitals, are seeing a measurable decrease in the amount of uncompensated care that they provide,” Baumgarten said.

Michigan hospitals have been the biggest beneficiary of Medicaid expansion, McHugh said, suggesting they are collecting “billions in federal dollars” in return for enrolling hundreds of thousands in government coverage.

“Whether enrollees or taxpayers are getting good value for this very high level of debt-funded federal spending is doubtful,” he said.

EPA in Flint crisis

Obama visited Flint in May 2016 — one of three stops in Michigan last year — and took a sip of filtered city water, assuring residents it was safe to drink. His sip was met with skepticism among residents of the predominately African-American city who remain distrustful of government due to an ongoing crisis of lead-contaminated water.

“I don’t blame the president in no kind of way,” said City Council President Kerry Nelson, who generally thinks Obama did “very well” in responding to the crisis.

“I think what they told him is as long as you use a filter, you can drink the water, because that’s what we’re still hearing. Now do I believe that? I don’t drink the water, I don’t cook with the water and the people I represent, I tell them don’t do it.”

A task force appointed by Gov. Rick Snyder has blamed the lead contamination of Flint’s drinking water on the failure by the Michigan Department of Environmental Quality staff to insist on putting corrosion controls into the water after the city switched from the Detroit water system to the Flint River.

After the state of Michigan declared an emergency in January 2016, Obama declared a federal emergency in Flint, but denied Snyder’s request to designate Flint a disaster zone because the contamination was a man-made calamity. He dispatched federal aid and staffers to help.

While the state took the brunt of the blame for Flint, at least one independent expert, a House committee chairman and an inspector general also have blamed Obama’s Environmental Protection Agency for failing to bring the resulting health crisis to the public’s attention sooner.

EPA Region 5 water expert Miguel Del Toro identified problems with Flint’s drinking water in February 2015, confirmed the suspicions in April and summarized the looming problem in a June internal memo. Critics accused Region 5 Administrator Susan Hedman of discrediting the memo’s information that should have set off alarms about the failure of state water officials to properly treat the Flint River water.

“EPA had the chance to be the hero here, and Ms. Hedman snatched defeat for EPA from the jaws of victory,” Marc Edwards, a Virginia Tech researcher whose water analysis in 2015 helped uncover Flint’s lead contamination, told the U.S. House Oversight committee in a March 2016 hearing.

Hedman resigned after a Detroit News story outlining her actions and comments, but EPA Administrator Gina McCarthy defended the agency and Hedman at a March 2016 hearing, arguing that state environmental officials misled federal officials for months.

The EPA’s Office of Inspector General said in an October 2016 report that the EPA could have acted as early as June 2015 to protect the public’s health because it had the authority and information necessary to force corrective action. The Snyder administration admitted in late September 2015 that lead contamination existed, and the EPA didn’t exert its authority until Jan. 21, 2016.

“While events were complicated, given what we know about the consequences of the Flint drinking water contamination, it is clear that EPA intervention was delayed,” according to the Inspector General report. “The EPA must be better prepared and able to timely intercede in public health emergencies like that which occurred in Flint.”


Staff Writers Candice Williams and Ian Thibodeau contributed.