Obama: Financial Crisis Could Turn Into A Catastrophe
President Barack Obama pressed Congress Monday night to urgently approve a massive economic recovery bill, using the first prime-time news conference of his presidency to warn that a failure to act “could turn a crisis into a catastrophe.”
With the nation falling deeper into a long and painful recession, Obama defended his program against Republican criticism that it is loaded with pork-barrel spending and will not create jobs.
“The plan is not perfect,” the president said, addressing the nation from the East Room of the White House. “No plan is. I can’t tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans.”
When the stimulus bill passed the House, not a single Republican voted for it. On Monday an $838 billion version of the legislation cleared a crucial test vote in the Senate by a 61-36 margin, with all but three Republican senators opposing it.
Obama said the federal government was the only power that could save the nation at a time of crisis, with huge spending outlays and tax cuts that he contended could save or create up to 4 million jobs.
“At this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life,” Obama said.
Rejecting criticism, he said that 90 percent of the jobs created by the plan would be in the private sector, rebuilding crumbling roads, bridges and other aging infrastructure.
“The plan that ultimately emerges from Congress must be big enough and bold enough to meet the size of the economic challenge we face right now,” Obama said.
Again and again, he stressed that the economy is in dire straits.
“This is not your ordinary, run of the mill recession,” he said. Obama said the United States aims to avoid the kind of economic pain that Japan endured in the 1990s — the “lost decade” when that nation showed no economic growth.
“My bottom line is to make sure that we are saving or creating 4 million jobs,” he said, and that homeowners facing foreclosure receive some relief.
While Obama stressed the economy in the opening minutes of the news conference, he also faced questions on foreign policy, and was asked how his administration would deal with Iran, a nation accused by the United States of supporting terrorism and pursuing nuclear weapons.
The president said his administration was reviewing its policy toward Iran “looking at places where we can have constructive dialogue.” He also said it was time for Iran to change its behavior.
“My expectation is in the coming months we will be looking for openings that can be created where we can be sitting across the table face to face,” Obama said.
He said that Iran must understand that funding terrorist organizations and pursuing nuclear weapons are unacceptable.
On the economy, Obama took a swipe at Republicans for criticizing the stimulus bill as wasteful. He pointed out that he inherited the current economic crisis and a doubling of the national debt from eight years of the Bush administration.
Yet, he also acknowledged that some components of the bill would not create jobs, as GOP critics have complained. While such spending plans might be worthy, he said, “those programs should be out of this.”
Obama spoke a day before his administration was to announce new policies to rescue the ailing financial industry. A major goal of that program is to persuade hedge funds, insurance companies and private equity firms to buy into some of U.S. banks’ riskiest investments.
“The credit crisis is real and it’s not over,” Obama said. He faulted the way the first $350 billion of the $700 billion bailout program was spent. “We didn’t get as big of a bang for the buck as we should have,” he said.
He said the government would work with banks to take bad debts off of their books so they will start making loans again. He said his goal was to restore market confidence.
Obama said he did not know whether more bailout money would be needed and, if so, how much that might be.