WASHINGTON — Two months into his term, President Barack Obama went before the American people Tuesday evening to say that he has enacted the broad plans needed to lift the country out of an economic crisis and urged the adoption of his $3.55 trillion budget as another critical step toward recovery.
“We’ve put in place a comprehensive strategy designed to attack this crisis on all fronts,” he said in a White House prime-time news conference, the second of his presidency. “It’s a strategy to create jobs, to help responsible homeowners, to restart lending and to grow our economy over the long term. And we are beginning to see signs of progress.”
He cautioned, however, that more work remains. He pressed for new powers to regulate financial institutions such as insurance giant American International Group, and for a budget blueprint that would greatly expand the size, reach and cost of the federal government.
He urged Americans and the world to be patient, saying it would take time to restore the economy, not to mention addressing other intractable problems such as violence in the Middle East. “I’m a big believer in persistence,” he said.
Foundation for prosperity
The economy dominated the discussion, and even as he suggested reasons for optimism, a shift of tone from him after weeks of dire warnings, Obama strived to tie hopes of recovery to his proposed budget for the fiscal year starting Oct. 1.
“This budget is inseparable from this recovery because it is what lays the foundation for a secure and lasting prosperity,” he said, all but warning that Congress’ rejection of his budget would imperil the economy.
Obama recognized that he won’t get all he wants, even from a Democratic Congress, and suggested a willingness to bargain on proposals to cut middle-class taxes and a plan to curb the emissions that cause global warming.
He said that he would insist on broad principles, including an expansion of health care, spending on education and energy, and a reduction in the deficit.
“The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this 10 or 20 years from now,” he said.
However, he didn’t include in his must-do list his own middle-class tax cut or the plan to “cap and trade” greenhouse-gas emissions. He said he did get the tax cut into the temporary plan to stimulate the economy, so “we know that’s going to be in place for at least the next two years.”
On the global-warming proposal, he said vaguely that “we’ve got to move toward a new energy future.” His budget blueprint, which lawmakers will start taking up this morning, faces increasing skepticism, however.
New forecasts from the nonpartisan Congressional Budget Office show already-skyrocketing annual deficits climbing even higher than Obama had predicted just weeks ago, reaching $1.8 trillion, or 13.1 percent of the entire economy in the current fiscal year; and $1.4 trillion, or 9.6 percent of the gross domestic product next year.
Mindful of the complaints that his budgets foretell red ink as far as the eye can see, Obama insisted that he’s being fiscally responsible. “We have made the tough choices necessary to cut our deficit in half by the end of my first term even under the most pessimistic estimates,” he said.
Budget committees in Congress signaled Tuesday that they will try to pare back some of Obama’s proposed spending increases. Said Sen. Dianne Feinstein, D-Calif.: “There will be change, there’s no question.”
AIG, border among topics
On other issues, Obama:
“We are sending millions of dollars in additional equipment hundreds of additional personnel that can help control the border,” he said. “We are going to continue to monitor the situation. And if the steps that we’ve taken do not get the job done, then we will do more.”
“I don’t take decisions like this lightly,” he said. “This was the right thing to do, and the ethical thing to do.”
“The last 64 days has been dominated by me trying to figure out how we’re going to fix the economy, and that affects black, brown and white.”
