Recovery from the economic recession, now in its 16th month, will take a long time, President Barack Obama cautioned Tuesday evening, but he reassured Americans that he was making progress “on all fronts.”
“This crisis didn’t happen overnight,” Obama said in his second prime-time news conference. And the recovery will take “many months,” he said, because “we’ve accumulated structural deficits that are going to take a long time” to rectify.
After a week of diversions like the scandal over bonuses paid to executives of American International Group’s rogue Financial Services division, the president convened the news conference in an attempt to refocus attention on his ambitious $3.6 trillion budget proposal, which he called “inseparable” from the recovery effort.
“It’s a strategy to create jobs, to help responsible homeowners, to restart lending and to grow our economy over the long term,” Obama said.
Watching over AIGDespite Obama’s attempt to change the subject, much of the discussion was about AIG, which created a blistering controversy this month when it was widely reported that $165 million of the money the company had received from the federal bailout of the financial sector would be paid out in bonuses.
In recent weeks, the furor has threatened to undermine the president’s efforts to bail out the financial sector by scaring investors away from the new program and by making it more difficult to wring more bailout money out of Congress.
Obama said he was confident that there would be “strong support from the American people and the Congress” for authority he is seeking for a broad overhaul of financial regulations that would give the administration more power to regulate and even take complicated financial companies whose collapse could threaten the entire system. Treasury Secretary Timothy Geithner is to outline the proposal Thursday when he testifies on Capitol Hill.
With the proposal in place, the sense at the White House was that the administration’s agenda was finally coming together, Chuck Todd, NBC News’ chief White House correspondent, reported Tuesday. The president believed now was a good time to return to the No. 1 goal of mobilizing the public behind his budget, officials said.
“I think the American people want to see and hear from their president right now, listen to the steps that he’s taking and the administration are taking to get the economy moving again,” White House press secretary Robert Gibbs told MSNBC on Tuesday.
Obama warns ‘tough choices’ coming In that light, Obama said it was time “to make some tough budgetary choices” because “we can’t ... sacrifice long-term growth.”
The focus should be on health care, energy, education, he said, to “build a foundation for long-term economic growth,” as opposed to what he called the illusory prosperity of the last few years, which he said was fueled by short-term maneuvering on Wall Street.
The most important of those targets is health care costs, the president insisted. And he said it would be the most difficult.
“The problem is not just in government-run programs. The problem is in the private sector, as well,” Obama said. “It’s experienced by families. It’s experienced by businesses.”
Obama said he would push proposals to fund new technologies in medical care, advance preventive care and monitor cost controls, signaling that the administration may seek to change the system under which the government reimburses health care providers under Medicaid and Medicare to emphasize “improved quality instead of the number of patients they treat.”
He acknowledged that such proposals would “cost money on the front end,” but he maintained that they offered “the prospect of reduced costs on the back end.”
Obama also disputed the contention that he was asking only Wall Street to sacrifice, saying the American people had already sacrificed enough.
“Folks are sacrificing left and right,” he said.
“You’ve got a lot of parents who are sacrificing on everything to make sure their kids can go go to college,” he contended, as are workers who are accepting unpaid furloughs “so their colleagues don’t get laid off.”
Obama’s remarks came a day after the administration unveiled . Under the plan, the government will finance the purchase by private investors of as much as $1 trillion of the $2 trillion in bad assets still held by the nation’s banks in hope of freeing banks to begin lending more freely and churn up economic activity.
The proposal led to a huge stock rally Monday, although stocks Tuesday as Wall Street digested all the information.
Obama takes to the airwavesThe news conference was another in a series of high-profile public appearances in which Obama has sought to steer the national conversation from outrage over past mistakes to working toward the future.
In just the six weeks since his last prime-time news conference, Obama has signed the $787 billion stimulus into law, announced a troop increase in Afghanistan and a plan to bring troops home from Iraq, rolled out plans to stem foreclosures and take toxic assets of the books of banks, and unveiled his budget.
In addition, a long interview with CBS’s “60 Minutes” aired Sunday night, and an ran in 31 newspapers worldwide Tuesday, a setup to next week’s meeting of leaders of the Group of 20 largest world economies.
On Wednesday, the president Obama heads to Capitol Hill to lobby Senate Democrats. On Thursday, he will conduct an online chat to answer questions from everyday Americans.
Meanwhile, an announcement is expected by Friday on a revamped U.S. strategy for Afghanistan and Pakistan.
The frenzy of activity comes as i nterest in the president remains extraordinarily high and as his job approval rating stands at 63 percent, according to the latest Gallup Poll. A majority of Americans — 54 percent — even approve of his handling of the AIG scandal.
As a result, all of the major broadcast networks scrubbed their entertainment programming from 8 to 9 p.m. ET on Tuesday. That decision — coming during the crucial sweeps period, when the networks showcase their highest-rated programming to drive up ad rates — was expected to cost NBC, ABC, CBS and Fox about $15 million in ad revenue.