By Brian Knowlton
Thursday, January 8, 2009
Thursday, January 8, 2009
WASHINGTON: President-elect Barack Obama on Thursday urged Congress to act quickly to pass sweeping economic stimulus measures, including a tax cut and an infusion of as much as $800 billion, or face the likelihood that "this recession could linger for years."
In making an unusually direct and high-profile appeal in remarks at George Mason University in northern Virginia, Obama was building on a campaign for swift economic action that he has conducted for weeks — each time in ever-sharper terms.
Every day this week he has issued a sobering message about the nation's perilous economic outlook, intended to prepare the public for difficult times, to show investors that he is focusing on the global crisis, and to goad reluctant members of Congress to act decisively.
"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," Obama said. "If nothing is done, this recession could linger for years. The unemployment rate could reach double digits."
The unemploymemt rate, now hovering around 7 percent nationally, is already projected to approach 9 percent by the end of this year. And although initial jobless claims unexpectedly fell by 24,000 to 467,000 in the week that ended Jan. 3, the Labor Department said today, the total number of people getting benefits rose to 4.6 million, the most since 1982.
Obama's speech came a day after the Congressional Budget Office released a stunning estimate that the federal budget deficit will reach $1.2 trillion this year, even before accounting for spending and tax cuts in the planned stimulus package that is expected to approach $800 billion over two years.
Obama's message was stark, warning not just of short-term pain from a recession that is already the longest in a quarter-century, but also of deep and systemic longer-term costs that could threaten American economic leadership if too little is done.
"We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future," Obama said. "And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world. In short, a bad situation could become dramatically worse."
While the speech was mostly one of generalities, Obama offered some details about how he hopes both to save money and modernize the economy.
He said he aimed to double the production of alternative energy within three years, a seemingly ambitious target; computerize all medical records in the country within five years, a move he said could save lives, money and jobs; modernize 75 percent of federal buildings and improve energy efficiency in 2 million homes; upgrade classrooms, libraries and laboratories in thousands of schools, and expand broadband access to rural areas .
Obama blamed the current economic morass — in particularly stark terms — on "an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington."
While Obama did not question the American capacity to recover or its potential for "future greatness," he cautioned that "it will take time, perhaps many years."
Such high-profile economic pronouncements are rare for a president-elect, and they stand in contrast to Obama's repeated refusals to insert himself in any detailed way into pressing foreign matters like the crisis in Gaza, saying that there can only be one president at a time.
He addressed fairly directly the reservations voiced by some Republican critics: that his proposed stimulus package is too expensive and will dangerously expand the already enormous federal budget deficit; that too many of the jobs created would be in the public sector, and that it is being pushed through with too little scrutiny.
"I understand that some might be skeptical of this plan," Obama said. "Our government has already spent a good deal of money, but we haven't yet seen that translate into more jobs or higher incomes or renewed confidence."
But in a sign that Obama's proposals are likely to face serious challenges, even some Democrats on Thursday criticized parts of his plan. Senator Kent Conrad of North Dakota, who is chairman of the the Budget Committee, said he doubted that a $140 billion proposal to stimulate the economy by withholding less from workers' paychecks — $500 each for individuals, $1,000 for families — would prove much more effective than the rebate checks sent last year, Bloomberg News reported.
Senator Ron Wyden, a Democrat from Oregon who is a member of the Finance Committee, shared Conrad's concerns. "In tough times people don't respond all that well to marginal changes," Bloomberg News quoted Wyden as saying.
Moreover, lawmakers have said that a proposed tax break for employers who hire new workers might be difficult to oversee and prove unworkable in practice.
Despite reservations with parts of Obama's stimulus plan, however, House Speaker Nancy Pelosi threatened to keep Congress in session through the Presidents Day recess in mid-February if it failed to act by then. "It is long overdue," the Web site Politico quoted Pelosi as saying shortly before Obama delivered his address. "We've been asking for this recovery package for one year. We've been working on this for a long time."
In an effort to reassure the public and skeptical members of Congress, Obama promised that decisions would be made transparently, that an "unprecedented effort" would be made to eliminate needless spending, and that "the overwhelming majority of the jobs created will be in the private sector."
But Obama insisted that only government could "break the vicious cycles that are crippling our economy," prevent "the catastrophic failure of financial institutions," restart the flow of credit and restore the regulations needed to prevent such a crisis in the future.
He urged "all Americans — Democrats and Republicans — to put good ideas ahead of the old ideological battles."
Democrats had hoped that Congress could approve a stimulus package by the time Obama is to take office on Jan. 20, but leading legislators now say that action is unlikely before at least the middle of February.
"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs," Obama warned. "More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."
In making an unusually direct and high-profile appeal in remarks at George Mason University in northern Virginia, Obama was building on a campaign for swift economic action that he has conducted for weeks — each time in ever-sharper terms.
Every day this week he has issued a sobering message about the nation's perilous economic outlook, intended to prepare the public for difficult times, to show investors that he is focusing on the global crisis, and to goad reluctant members of Congress to act decisively.
"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," Obama said. "If nothing is done, this recession could linger for years. The unemployment rate could reach double digits."
The unemploymemt rate, now hovering around 7 percent nationally, is already projected to approach 9 percent by the end of this year. And although initial jobless claims unexpectedly fell by 24,000 to 467,000 in the week that ended Jan. 3, the Labor Department said today, the total number of people getting benefits rose to 4.6 million, the most since 1982.
Obama's speech came a day after the Congressional Budget Office released a stunning estimate that the federal budget deficit will reach $1.2 trillion this year, even before accounting for spending and tax cuts in the planned stimulus package that is expected to approach $800 billion over two years.
Obama's message was stark, warning not just of short-term pain from a recession that is already the longest in a quarter-century, but also of deep and systemic longer-term costs that could threaten American economic leadership if too little is done.
"We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future," Obama said. "And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world. In short, a bad situation could become dramatically worse."
While the speech was mostly one of generalities, Obama offered some details about how he hopes both to save money and modernize the economy.
He said he aimed to double the production of alternative energy within three years, a seemingly ambitious target; computerize all medical records in the country within five years, a move he said could save lives, money and jobs; modernize 75 percent of federal buildings and improve energy efficiency in 2 million homes; upgrade classrooms, libraries and laboratories in thousands of schools, and expand broadband access to rural areas .
Obama blamed the current economic morass — in particularly stark terms — on "an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington."
While Obama did not question the American capacity to recover or its potential for "future greatness," he cautioned that "it will take time, perhaps many years."
Such high-profile economic pronouncements are rare for a president-elect, and they stand in contrast to Obama's repeated refusals to insert himself in any detailed way into pressing foreign matters like the crisis in Gaza, saying that there can only be one president at a time.
He addressed fairly directly the reservations voiced by some Republican critics: that his proposed stimulus package is too expensive and will dangerously expand the already enormous federal budget deficit; that too many of the jobs created would be in the public sector, and that it is being pushed through with too little scrutiny.
"I understand that some might be skeptical of this plan," Obama said. "Our government has already spent a good deal of money, but we haven't yet seen that translate into more jobs or higher incomes or renewed confidence."
But in a sign that Obama's proposals are likely to face serious challenges, even some Democrats on Thursday criticized parts of his plan. Senator Kent Conrad of North Dakota, who is chairman of the the Budget Committee, said he doubted that a $140 billion proposal to stimulate the economy by withholding less from workers' paychecks — $500 each for individuals, $1,000 for families — would prove much more effective than the rebate checks sent last year, Bloomberg News reported.
Senator Ron Wyden, a Democrat from Oregon who is a member of the Finance Committee, shared Conrad's concerns. "In tough times people don't respond all that well to marginal changes," Bloomberg News quoted Wyden as saying.
Moreover, lawmakers have said that a proposed tax break for employers who hire new workers might be difficult to oversee and prove unworkable in practice.
Despite reservations with parts of Obama's stimulus plan, however, House Speaker Nancy Pelosi threatened to keep Congress in session through the Presidents Day recess in mid-February if it failed to act by then. "It is long overdue," the Web site Politico quoted Pelosi as saying shortly before Obama delivered his address. "We've been asking for this recovery package for one year. We've been working on this for a long time."
In an effort to reassure the public and skeptical members of Congress, Obama promised that decisions would be made transparently, that an "unprecedented effort" would be made to eliminate needless spending, and that "the overwhelming majority of the jobs created will be in the private sector."
But Obama insisted that only government could "break the vicious cycles that are crippling our economy," prevent "the catastrophic failure of financial institutions," restart the flow of credit and restore the regulations needed to prevent such a crisis in the future.
He urged "all Americans — Democrats and Republicans — to put good ideas ahead of the old ideological battles."
Democrats had hoped that Congress could approve a stimulus package by the time Obama is to take office on Jan. 20, but leading legislators now say that action is unlikely before at least the middle of February.
"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs," Obama warned. "More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."
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