January 8th, 2009
11:23 AM ET
6 years ago

TRANSITION: Obama addresses the economy

Watch Obama's speech on CNN.com/live.
Watch Obama's speech on CNN.com/live.

(CNN) - President-elect Barack Obama on Thursday said Congress must take "dramatic action" on his economic aid package as soon as possible, warning that a failure to do so would have devastating long-term consequences for the nation.

"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits," he said.

Obama laid the groundwork for urgent movement on his "American Recovery and Reinvestment Plan," a plan he says will save or create more than 3 million jobs and invest in health care, energy and education, among other priorities.

Full story

Read the full speech after the jump

Throughout America’s history, there have been some years that simply rolled into the next without much notice or fanfare. Then there are the years that come along once in a generation – the kind that mark a clean break from a troubled past, and set a new course for our nation.

This is one of those years.

We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. Just in the past year, another 2.8 million Americans who want and need full-time work have had to settle for part-time jobs. Manufacturing has hit a twenty-eight year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.

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. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. 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. 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.

This crisis did not happen solely by some accident of history or normal turn of the business cycle, and we won’t get out of it by simply waiting for a better day to come, or relying on the worn-out dogmas of the past. We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, DC. For years, too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability. Banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn’t afford. Politicians spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government.

Now, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness. It will take time, perhaps many years, but we can rebuild that lost trust and confidence. We can restore opportunity and prosperity. We should never forget that our workers are still more productive than any on Earth. Our universities are still the envy of the world. We are still home to the most brilliant minds, the most creative entrepreneurs, and the most advanced technology and innovation that history has ever known. And we are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again.

That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.

It’s a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges. For if we hope to end this crisis, we must end the culture of anything goes that helped create it – and this change must begin in Washington. It is time to trade old habits for a new spirit of responsibility. It is time to finally change the ways of Washington so that we can set a new and better course for America.

There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy. It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.

That is why we need to act boldly and act now to reverse these cycles. That’s why we need to put money in the pockets of the American people, create new jobs, and invest in our future. That’s why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.

That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.

To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.

To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won’t save billions of dollars and thousands of jobs – it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.

To give our children the chance to live out their dreams in a world that’s never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We’ll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future.

To build an economy that can lead this future, we will begin to rebuild America. Yes, we’ll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we’ll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world. And it means investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.

Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95% of working families will receive a $1,000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can’t find new ones, we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. Government at every level will have to tighten its belt, but we’ll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care.

I understand that some might be skeptical of this plan. 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 in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.

Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now.

We have to make tough choices and smart investments today so that as the economy recovers, the deficit starts to come down. We cannot have a solid recovery if our people and our businesses don’t have confidence that we’re getting our fiscal house in order. That’s why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.

That also means an economic recovery plan that is free from earmarks and pet projects. I understand that every member of Congress has ideas on how to spend money. Many of these projects are worthy, and benefit local communities. But this emergency legislation must not be the vehicle for those aspirations. This must be a time when leaders in both parties put the urgent needs of our nation above our own narrow interests.

Now, this recovery plan alone will not solve all the problems that led us into this crisis. We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets. It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes. It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.

No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.

It is time to set a new course for this economy, and that change must begin now. We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. 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.

That is not the country I know, and it is not a future I will accept as President of the United States. A world that depends on the strength of our economy is now watching and waiting for America to lead once more. And that is what we will do.

It will not come easy or happen overnight, and it is altogether likely that things may get worse before they get better. But that is all the more reason for Congress to act without delay. I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning.

That is why the time has come to build a 21st century economy in which hard work and responsibility are once again rewarded. That’s why I’m asking Congress to work with me and my team day and night, on weekends if necessary, to get the plan passed in the next few weeks. That’s why I’m calling on all Americans – Democrats and Republicans – to put good ideas ahead of the old ideological battles; a sense of common purpose above the same narrow partisanship; and insist that the first question each of us asks isn’t “What’s good for me?” but “What’s good for the country my children will inherit?”

More than any program or policy, it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war, depression, and fear itself. And if we do – if we are able to summon that spirit again; if are able to look out for one another, and listen to one another, and do our part for our nation and for posterity, then I have no doubt that years from now, we will look back on 2009 as one of those years that marked another new and hopeful beginning for the United States of America. Thank you, God Bless You, and may God Bless America.

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Filed under: Candidate Barack Obama
soundoff (217 Responses)
  1. sandy

    Fear mongering? We all better be afraid! I watched Mr. Obama's speech and I did not see "fear mongering", I saw TRUTH! It's something we haven't heard for many years. I saw a man stand on a podium and tell us like it is. Then, I listened to the pundits. What they want out of this man, I don't know. Where were they the past eight years as we headed into the abyss? Does he have an answer for everything? Of course not. We didn't get in this position overnight and we won't get out of it overnight. Instead of the pundits putting him down, get out there and work to help him just like every American should do. I feel good about this man, and until he screws us, I will continue to feel good about him, and I WILL GIVE HIM A CHANCE.

    January 8, 2009 11:54 am at 11:54 am |
  2. BUSH BEGONE AND NOW 75% OF AMERICA AGREES, FINALLY!

    "begging and fear mongering"?

    I guess it would be better to have a President that takes a year to admit we are even in a recession?

    Of course, if the repubs have their way and become the obstructionist they appear poised to be, then we will get to see if it was fear mongering or the reality Obama warned about while we all are in the soup lines.

    I would have to point out that the committee of economists he and the team have gathered should know more about these issues than I do and we need to trust that they know better than the average Congressman on either side.

    Of course, after the shrub, I do understand why citizens no longer trust the government.

    January 8, 2009 11:54 am at 11:54 am |
  3. Pennie Johnson

    We've let an idiot handle our money for eight years. We have nothing to lose. To answer Bill Clinton during the primaries, yeah, I'll roll the dice. I'll take brains and empathy for working people any day.

    January 8, 2009 11:54 am at 11:54 am |
  4. Michael M, Phoenix AZ

    What's the matter with most of you? This economic problem has been on the verge for years starting with Regan's policies. Finally, we have someone who has enough guts to spell it OUT to the public, AND he also happen to be quite articulate. Something we have not had for the past 8 years. Carter predicted the current oil crises would happen about this time, and no listened like Regan or the so-called Big 3 and the oil barons. In fact, Regan decided to not follow any energy saving agenda at all that Carter had started.

    January 8, 2009 11:56 am at 11:56 am |
  5. Joan

    Great Speach. Good straightforward common sense. Senate and Congress, please let him do it. And please don't even think of things like a Polar Bear Museum.

    January 8, 2009 11:58 am at 11:58 am |
  6. LIP

    Speeches are nice, but do little to heal wounds brought on by 2 years of campaining on the notion that this is all Bush's fault. Read the paragraph starting with "This crises did not happen" and you will see a half hearted attempt to do so, but clearly not one that will heal the wounds brought on by those two years. It will take far more than that and I hope that Obama finds the words soon.

    January 8, 2009 11:58 am at 11:58 am |
  7. Jam Master Mike

    To all the ones who are saying that he is causing fear and fear-mongering...

    It's about the economy and it is in pretty bad shape. Get your heads out of the moon and look around at your fellow americans and the jobs they have lost or about to lose. Also he is warning all of America that this will not get better as soon as we would like it too and things will take time to fix. I guess you all didn't go to college because your analysis is awful.... or you just hate him and will go with what the right says....

    He just gave an evaluation of the situation we are in, sorry that it wasn't sugar coated like Bush lead people like you to believe in his tenure. But at least Obama is being honest with what's going on.

    Obama isn't making this an issue about himself, he is making it an issue that we actually have to deal with. Stop running away from the problem and deal with it head on.

    And what does the economy have to do with Chicago politicians..... Stupid remarks from a simple minded people... and yes Im talking to Puff and Get over it...

    January 8, 2009 11:58 am at 11:58 am |
  8. Jan - Or

    President elect package is positive and encouraging and congress must act without delay rather dragging their feet and no action. America’s future is on Congress hands now and I am watching each one decision.

    January 8, 2009 12:01 pm at 12:01 pm |
  9. Michelle

    I feel Barack is going in the RIGHT direction. We ALL got us here and to get US out it will take all of US. Just like on the battlefield sometimes you suffer the casualties of a few for the greater good. Some may not get the earmarks, pet projects and waste they want, but if they hold off it will get better. Barack is lining out a great plan, of course he has to be evasive on some things or it would cause a battle during the speach. He is choosing his battles and choosing the playing fields. You America questioned if he was ready to lead a nation, well here is one of his biggest battles.

    January 8, 2009 12:01 pm at 12:01 pm |
  10. LS, Austin, TX

    It appears to me there are a few of you who are struggling with the idea that we actually are going to have a President that uses his brain.

    Bush really left his impression on you all pretty deep – huh?

    January 8, 2009 12:02 pm at 12:02 pm |
  11. Brooklyn

    Where are the billions of dollars going to come from? And will I be taxed more because I make 50k plus a year, so I'm considered "rich"?

    January 8, 2009 12:03 pm at 12:03 pm |
  12. Puff

    Yeah, fear mongering is right. Our situation is SO dire, we need to print more money and make the government larger. The government will buy all of us economic recovery. Instead of cutting the spending he is raising the spending on very stupid projects. Oh yeah, he is also taking from the rich and giving to the poor. That will really grow us.
    Doesn't do me a bit a good if the bum on the street has an extra 20 bucks a month for his wine.
    Nobama will put this country is going to put this country in the ash bin.

    January 8, 2009 12:03 pm at 12:03 pm |
  13. RinFL

    OK all of you cry babies out there........When the man gets sworn into his position will be the time to lay down the specifics of the plan. Don't forget that the entire thing will have to be discussed on the floor of both houses and they will have to VOTE on it. Watch C-span and I am sure that you will be able to see it. Some of you people who post are in serious lack of the most basic education on civics and the procedures of our government. And for a bunch of people who are constantly harping on the Constitution and perceived transgressions against said document need to actually read the document. Go and get yourself educated from a broad variety of sources and apply critical thinking for yourself. Enough with the regurgitation of what others are telling you, and enough with the "who is John Galt" on every comment board.

    January 8, 2009 12:03 pm at 12:03 pm |
  14. Maurice from Ontario

    If each individual could just say "yes, I know this won't be easy, but I'm willing to do my part", just think of how quickly we could reverse this mess!

    Thanks, PE Obama! It is together that we can make this journey.

    January 8, 2009 12:06 pm at 12:06 pm |
  15. Get Serious!

    All of you people who keep blaming President Bush for this mess we're in really should check your history before making moronic comments. Congress voted for the war (Yes, even John Kerry... remember "I voted against the war before I voted for it!?), President Bush, John McCain, and the Banking Commissioin went to congress several times requesting stricter regulations on the mortgage industry (But of course, you can blame the Democrats for that mess. Remember Schumer, Franks, and Dodd saying that the mortgage industry wasn't broken so they were not going to fix it? All the while lining their pockets from Fannie and Freddie. And don't forget Bill Clinton who started the deregulation in the first place).

    But, I guess that's how you sleep at night. Bury your heads in the sand and keep voting in the people who really put us here.

    January 8, 2009 12:07 pm at 12:07 pm |
  16. Lisa

    WOW!!! For those of you out there who are critical of Obama I can only surmise your criticism is because 1. you are a repug 2. voted for Bush twice and 3. (see #2) because you have no idea what real leadership looks like!!! Just you wait.....this guy is the real deal and win or lose in his attempt to save this great nation from collapsing, HE IS A REAL LEADER!!!

    January 8, 2009 12:10 pm at 12:10 pm |
  17. Ted:Canada

    YOU ARE IN TROUBLE – give Obama a chance!

    Wal-Mart, Macy's indicate bleak December for U.S. retailers
    Last Updated: Thursday, January 8, 2009 | 11:20 AM ET; CBC News

    "You're looking at a wave of store closings and layoffs like we never seen before," said Britt Beemer, chief executive officer of America's Research Group, a South Carolina-based consumer research company.

    January 8, 2009 12:10 pm at 12:10 pm |
  18. Irma in North Carolina

    He is going to have a tough time getting all his progams through, cause the republicans are going to work against him every chance they get. They just cant get over the fact that their canidate they voted for and his pretty VP that hurt the party didnt make it in there.

    January 8, 2009 12:11 pm at 12:11 pm |
  19. CBC

    Is anybody else out there sick to death of the self-righteous, holier than thou attitudes that the Republican Politicians and their 'talking heads' have?

    They seem to keep forgetting that THEY ARE THE PROBLEM!!

    And that ugly, nasty Ann Coulter needs to be eliminated from the face of the planet.

    January 8, 2009 12:11 pm at 12:11 pm |
  20. shaik

    We have never had, in recent memory, when a President-elect HAD to get squarely involved in real policies and legislative initiatives prior to Jan 20... until NOW.
    That's because the country is in total mess and he has to act and is doing a remarkable job LEADING the discussion. So, just stop this partisan bickering (your boy and his scary running mate LOST – face it) and give the new President a chance.

    January 8, 2009 12:13 pm at 12:13 pm |
  21. Edna, Hawaii

    Watch Consumer Spending increase & Economy stimulus work, from the ground up, when each tax payer is given a stimulus package of $100K. Don't throw pennies to them as a stimulus, then say it doesn't work (300-$500) . Try a real amount, it would work !!!!!
    It would immediately bring consumer confidence and they would immediately inject money into the economy by buying items they want and by paying their mortgage, credit cards which would raise their Credit Rating, and allow them to then make loans for more puchases. Immediate results, and accountable, and politically smart.

    January 8, 2009 12:15 pm at 12:15 pm |
  22. Man in DC

    Obama is really looking at this with a common folk vision. I think he hasn't forgotten where he came from and how money effects people. Now the problem lies with conveying that to the congress and the senate.....Alot of these folks aren't familiar with canceling your healthcare insurance because you can't afford it......Until they truely understand the peoples situations I fear they will continue to miss the fact that giving the bailout money to the people would stimulate the economy more than giving it to big business.

    January 8, 2009 12:15 pm at 12:15 pm |
  23. Rick in WA

    Why is there nothing here about the fact that the mortgage meltdown was caused by government policies that rewarded financial institutions for giving loans to people who could not afford them? The liberal program to "ensure home ownership for every deadbeat" was the root cause. Human nature took over from there. When government rewards business for making bad decisions, then criticizes free market forces, they confuse all the sheep, red and blue.

    January 8, 2009 12:18 pm at 12:18 pm |
  24. Alice

    All during the speech, the song "It's only a paper moon", kept playing in my mind. How long did it take us to get to the moon? We eventually did, and I think the US will get there again, won't we?

    January 8, 2009 12:19 pm at 12:19 pm |
  25. Matt

    @ Chipster

    GOPers only care when it's someone else spending the money. When they're spending it, their self-righteous auto-justification kicks in.

    January 8, 2009 12:20 pm at 12:20 pm |
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