Bluntly declaring that the “day of reckoning has arrived” after years of financial irresponsibility, President Barack Obama told Americans on Tuesday night that “we will rebuild, we will recover and the United States of America will emerge stronger than before.”
In the opening passage of his address to a joint session of Congress, Obama said “the impact of this recession is real, and it is everywhere,” the result of extravagant buying, gutted regulations and inadequate financial planning.
The president spared no one in his analysis of who was at fault: Too many everyday Americans bought homes they could not afford and did not think about their next mortgage payments. Too many banks handed out loans to people who could not pay. Politicians allowed the surplus to disappear with tax cuts for the rich. Regulations were gutted to help companies make a quick profit.
“Well, that day of reckoning has arrived, and the time to take charge of our future is here,” the president said.
Out of the rubble, Obama said, was an opportunity to remake the economy and build a foundation for lasting prosperity.
“The weight of this crisis will not determine the destiny of this nation,” he said. “The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.”
The trappings of a State of the Union
Obama, who is only five weeks into his term, did not cast the speech as a formal State of the Union address, although it had all the same trappings. Instead, he described it as a “frank talk” about his economic agenda, which he is to flesh out in his official budget blueprint to Congress on Thursday.
Obama praised lawmakers for passing a $787 billion version of his economic rescue plan, which he said would save or create 3.5 million jobs.
But more is needed, he said. After a line-by-line review of the budget, the president said he had identified $2 trillion in savings over the next 10 years, which he promised would cut the deficit in half by the end of his first term. He said he had appointed Vice President Joe Biden to lead a “tough, unprecedented oversight effort, because nobody messes with Joe.”
Obama also touched on foreign policy, but that was largely left for other speeches. This speech was devoted to filling in the details of the budget approach Obama has outlined in broader terms during his first few weeks in office.
Uncle Sam as neighborhood banker
The president indicated that the government would be getting into the consumer banking business, creating a federal lending fund to help provide auto loans, college loans and small business loans “to the consumers and entrepreneurs who keep this economy running.” He did not provide any further details.
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Nor did he provide specifics of a promised housing plan that “will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages.” But he promised that under the plan, the average family would be able to save nearly $2,000 a year by refinancing their mortgage.
And he said he would use “the full force of the federal government” to ensure that banks would have enough money to lend “even in more difficult times.”
Again, he did not say how he planned to do that, but he vowed that unstable banks would be forced to make “the necessary adjustments” and that executives responsible for problems would be held accountable.
Obama said he understood that Wall Street may be more comforted by an approach that gives banks bailouts with no strings attached,” but he said such an approach would not solve the problems in the financial system.
“Our goal is to quicken the day when we re-start lending to the American people and American business and end this crisis once and for all,” he said.
Obama lays out three-pronged approach
Obama challenged Congress to “join me in doing whatever proves necessary, because we cannot consign our nation to an open-ended recession.”
He said he would ask lawmakers to significantly raise federal funding in three critical sectors of the economy when he submits his budget later this week: energy, health care and education.
“We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before,” Obama said.
He said the stimulus package was on track to double the nation’s renewable energy resources and would soon put Americans to work “making our homes and buildings more efficient.”
The next step, he said, is to make renewable energy “the profitable kind of energy.” He said he would ask for $15 billion dollars a year to develop technologies like wind power and solar power; advanced biofuels and clean coal; and more fuel-efficient cars and trucks.
And even as the cost of health care continues to erode Americans’ savings, the government has continually put off reforming the health care system, Obama said. He said he would call business leaders, doctors and other health care providers to a a conference next week to draw up ideas for a new health care system.
“Let there be no doubt: Health care reform cannot wait, it must not wait and it will not wait another year,” he said.
Finally, Obama decried an education system that produces one of the highest high school dropout rates of any industrialized nation — and half of the students who begin college never finish.”
Obama said his budget would seek major increases in funding for incentives to improve teacher performance and pay, programs to help schools meet high standards and expand the nation’s growing network of public-private “charter schools.”
“By 2020, America will once again have the highest proportion of college graduates in the world,” the president promised.
President taking advantage of support
Obama is riding a strong wave of public support. Overall, 68 percent of people approve of his job performance, a new Washington Post-ABC News poll found. A New York Times/CBS News polls found that that more than three-quarters of those surveyed were optimistic about the next four years with Obama in charge and that similar majorities said they were confident in his ability to make the right decisions about the economy.
But Republicans, most of whom voted against Obama’s stimulus plan, rejected his proposals.
Responding in advance to Obama’s speech, top Republicans said the president relied too heavily on spending and not enough on tax cuts to try to revive the economy. They said they wanted to work with Obama, but their criticisms were sharp.
“The way to lead is not to raise taxes and put more money and power in hands of Washington politicians,” said Louisiana Gov. Bobby Jindal, who gave the Republican Party’s official response .
Obama’s plan will expand the government, “increase our taxes down the line and saddle future generations with debt,” said Jindal, who is considered a likely Republican challenger to Obama in 2012. “It’s irresponsible.”
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