Obama: Pass the Stimulus or the Recession Will Linger

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    NEWSLETTERS

    AP
    President-elect Barack Obama adressed the economy at George Mason University in Fairfax, Va. today.

    President-elect Barack Obama warned of dire and long-lasting consequences if Congress doesn't pump unprecedented dollars into the national economy, making an urgent pitch Thursday for his mammoth spending proposal in his first speech since the election.

    "In short, a bad situation could become dramatically worse" if Washington doesn't go far enough to address the spreading crisis, the Democrat said as fresh economic reports showed an outlook growing increasingly grim.

    Since his November election, Obama has deferred to President George W. Bush on foreign policy matters such as the Middle East. But, with the worsening of the economic situation, Obama has waded deeply into domestic issues as he works to generate support for his plan to create jobs and jolt the economy into recovery.

    In the speech at George Mason University outside Washington, Obama asked Congress to work with him "day and night, on weekends if necessary" to pass a revival plan within the next few weeks so that it can be ready for his signature shortly after he takes office on Jan. 20.

    [Read the full text of Obama's remarks]

    As Obama spoke, his economic advisers were on Capitol Hill to brief Democratic lawmakers on details of his economic plan. Senate Finance Committee members met privately to assess his proposals. The Senate Democratic caucus planned a late afternoon meeting, followed by a news conference by Majority Leader Harry Reid and other caucus leaders.

    Obama Makes Plea for Swift Economic Stimulus

    [NEWSC] Obama Makes Plea for Swift Economic Stimulus
    Hear the President-elect's comments on the future of the economy. (Published Thursday, Jan 8, 2009)

    The president-elect cast blame on "an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington." But he added, "The very fact that this crisis is largely of our own making means that it is not beyond our ability to solve."

    "I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," he said.

    Obama laid out goals of doubling the production of alternative energy over three years, updating most federal buildings to improve energy efficiency, making medical records electronic, expanding broadband networks and updating schools and universities.

    "It's a plan that represents not just new policy but a whole new approach to meeting our most urgent challenges," Obama said.

    Still, his remarks shed no new light on the details of his plan that could cost as much as $775 billion over two years in tax cuts and spending. And, he said little about the unprecedented red ink and rising debt confronting the government, even after spending days reassuring the public and Congress that he is committed to tackling long-term deficits after the economy rebounds.

    The speech marked Obama's highest-profile effort yet on an issue certain to define and dominate his early presidency. It was the fourth day in a row that he had made a pitch for a huge infusion of taxpayer dollars to revive the sinking economy he will inherit from Bush.

    Throughout his remarks, Obama painted a stark picture, including double-digit unemployment and $1 trillion in lost economic activity — that recalled the days of the Great Depression in the 1930s.

    But he expressed confidence the country could meet the challenge, saying: "We are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again."

    The economic news is, indeed, grim.

    Consumers and companies are folding under the negative forces of a collapsed housing market and a global credit crunch. The recession, which started in December 2007, already is the longest in a quarter-century.

    A report that came out the same day as Obama's speech showed that the number of people drawing jobless benefits rose last week to the highest level since 1982, demonstrating the troubles the unemployed are having in finding new jobs.

    And broader unemployment figures due out Friday are expected to show that the U.S. lost a net total of 500,000 jobs in December. That would bring 2008's total job losses to 2.4 million, the first annual job loss since 2001 and the highest since 1945, though the number of jobs has more than tripled since then.

    Obama's events have increasingly taken on the trappings and air of the presidency. Thursday's speech — coming 12 days before he takes over at the White House — was a particularly showy move. Presidents-elect typically stick to naming administration appointments and otherwise staying in the background during the transition period between Election Day and Inauguration Day, but Obama has clearly made the calculation that a nation anxious about its economic outlook needs to hear from him differently and more frequently.

    Speaking a day after the release of a stunning new deficit estimate — that the federal red ink will reach an unprecedented $1.2 trillion this year, nearly three times last year's record — Obama acknowledged some sympathy with those who "might be skeptical" of the stimulus. Vast sums already have been spent or committed by Washington in an attempt — largely unsuccessful so far — to get credit, the lifeblood of the American economy, flowing freely once again.

    Such statements are meant to appeal to both parties' budget hawks, whom Obama wants to win over so that approval of a package draws wide, bipartisan support in the Democratic-led Congress.

    To answer their concerns, he promised to allow funding only for what works. He also pledged a new level of transparency about where the money is going. A day earlier, he promised to tackle the out-of-control fiscal problem posed by Social Security and Medicare entitlement programs and named a special watchdog to clamp down on all federal programs.

    Obama made broader arguments, too, saying that the private sector cannot do what is needed now.

    "At this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe," he said.

    Obama also promised action to address the economy's ills beyond the package, such as tackling a potential wave of home foreclosures, preventing the failure of financial institutions, rewriting financial regulations and keeping accountable the "Wall Street wrongdoers" who engage in risky investing.