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. katiec

    My goodness. Fear mongering? Another Limbaugh listener with their head in the sand. Anyone who fails to see the diasters the republicans have brought us has to be living in a make believe world.
    Unfortunatly, until the party, ego first mind set stops, our country will remain in peril.
    There must be unification to save our country. Are you listening
    politicians? No conservatives. liberals but true people representing
    us and our country.

    January 8, 2009 12:21 pm at 12:21 pm |
  2. ron dawson

    cnn rep made the statement ( corperate america has had five quarters of loss) what about the oil companies who had record profits for the last four years at the expense of the american people and the world should they not be held responsible for their coruptness only because of their power and those in office who allowed these profits to go by unquestioned are we now in the mess we are now in we should not allow people to slide by because of who they are or how much power they have in our government but remove them from that power so we can once again be the country we are capable of being

    January 8, 2009 12:24 pm at 12:24 pm |
  3. methinks

    In watching the comments on CNN after the speech I noticed that the commentary still displayed a complete lack of understanding of what is going on with the American economy. So here it is in a nutshell as Mr. Obama was not blunt enough. One, on both the government and business level America is bankrupt both on the financial level and the integrity level. America's reign as world finance superpower has ended. It is gone with the wind. Two, there is no quick fix. After Personal bankruptcy it takes 7 years just to get credit again, It takes one to two decades to achieve prosperity again. The tools that the Government is proposing to use will take 18 months to 5 years to come on line and then the trickle down effect takes even more time. This takes even longer as past debt and these humongous deficits have to be paid down. It will take a long long time just to get back to a positive balance sheet.

    America needs to get past its adolescent "quick fix" mentality or it is really sunk. In finances any one plan properly executed is better than no plan or too many plans. Mr. Obama is starting from the right place. First thing in financial crisis is to state honestly and accept where you are...Broke. Then you identify areas to improve and then you address plans to solve problems. Then you make detailed plans. To demand details at this point displayes the complete lack understanding of finances that got America into this spot in the first place.

    January 8, 2009 12:24 pm at 12:24 pm |
  4. Greg in MN

    @ Jan

    And those questions would be?????? Maybe give examples???? What do you want to know?

    Either come up with something constructive to ask or please stop complaining just because you can.

    January 8, 2009 12:24 pm at 12:24 pm |
  5. S Callahan

    I summon the spirit of God to move in America..the same spirit that has gone with us generations before.

    Praise the Lord, you angels of his, praise his glory and his strength. Praise him for his majestic glory, the glory of his name. Come before him in sacred garments. The voice of the Lord echos from the clouds. The God of Glory thunders through the skies. "So powerful is his voice, so full of majesty." Psalm 29:1-4

    Seriously, the state of our country requires us to put on the sackcloth and seek his way....there is no other out

    January 8, 2009 12:25 pm at 12:25 pm |
  6. Judy from PA

    It all sounds well and good, but implementing it is the hard part. Look at the bank bail out. We gave the banks a ton of money and they are sitting on it. Not lending it out to people. Throwing money at things doesn't make it work.

    January 8, 2009 12:26 pm at 12:26 pm |
  7. John

    Could someone please tell me if I'm understanding this correctly.... The government is going to give the car manufactures money to keep them from going bankrupt. Now if Im understanding this....it won't help us because the consumer can't buy the cars anyway...so how does that help the economy?? If you gave the money to the consumer then the consumer would buy from the dealership which moves product and that in turn would jumpstart the economy......So, am I close to understanding this in laymans terms?? If I am then why aren't they working things that way?

    January 8, 2009 12:27 pm at 12:27 pm |
  8. ron dawson

    ooh he said god bless america at the end of his speech alot of people are going to like that thats how this country was founded

    January 8, 2009 12:27 pm at 12:27 pm |
  9. Bill in California

    When the Emperor spoke the people were amazed, oblivious to the fact he had no clothes. No clothes, no experience, no record to stand on, just talk.

    January 8, 2009 12:28 pm at 12:28 pm |
  10. William Isely

    Obama's speech, while inspiring in general, did not address with sufficient priority that major root to our present problems, that is too much foreign oil, and hence money going abroad, is going out the tailpipes of our cars.
    When you add up the numbers of how much oil we use in our cars and light trucks and also how much oil we are importing (75%), to solve this problem as well as the one of global warming, we have to eliminate using liqud fuels in our cars. Hybrids won't get us there.
    The only solution we can do now is to use the recently developed carbon/lead battery technology and across the board build, at least 90%, only all electric, battery powered cars. The government will have to make this the law as the car companies see all electric vehicles as less profitable because they are more reliable and last longer. For history look at what GM did with the EV-1.

    January 8, 2009 12:28 pm at 12:28 pm |
  11. Rick

    Reid and Pelosi have been telling us for months that immediate action is needed. And what have they done – taken virtually the entire time as vacation. They'll get tired of working after a couple of weeks and go back to the same old thing. There's no way they'll have something that's been thoroughly reviewed for signing in 2-3 weeks. They should have started 3 months ago instead of going begging for their jobs. Since Obama is not going to give them specifics, they are well behind any reasonable schedule.

    January 8, 2009 12:28 pm at 12:28 pm |
  12. a little sad

    John Galt in Colorado January 8th, 2009 11:27 am ET

    WHO IS JOHN GALT? Please someone answer the question before it is too late!!!!!!!!!!

    He is a fictional character from a book by one of Alan Greenspan's favorite authors.

    Just one more "oops" from Mr Greenspan.

    January 8, 2009 12:30 pm at 12:30 pm |
  13. jean in MN

    This president-elect has SO much common sense, for example, his remarks:

    "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."

    Contrast that with the outgoing President who couldn't pour piss out of a boot with the directions written on the heel.

    January 8, 2009 12:30 pm at 12:30 pm |
  14. Larry

    Typical Democrat --HE HAS SAID NOTHING-No specifics–

    Stock market FELL immediately after speech-

    January 8, 2009 12:30 pm at 12:30 pm |
  15. Ray Fisher

    Great speech, he is on top of things. The challenges we face are daunting and President Obama's plans may not be dead-on-balls accurate at first but its nice to have a plan.I think his approach via alternative energies is a winner because it is a win-win proposal as if it works we win and if it doesn't we still win by simply getting off of oil. I'm betting his new energy secretary Dr. Chu will roll out the hydrogen economy and the tech boom will begin. Everything from autos, UPSs, home energy stations, buses, trains, aircraft, etc.. will convert to fuel cells before long. That is our greatest potential to be able to produce our own fuel and only what we need. Remember, fuel cells never idle, they either move or are off, very efficient, clean, and modern!!!

    January 8, 2009 12:31 pm at 12:31 pm |
  16. Joan

    Jan,

    Exactly what real questions do you want answered? I think he addressed the issues well and gave good answers

    January 8, 2009 12:31 pm at 12:31 pm |
  17. Charles L. Shaw, Liverpool, NY

    WHO IS JOHN GALT? Why read or re-read Atlas Shrugged, seems to me this was required reading to graduate High School.
    I understand your point but your not going to get these Socialist to go back and learn that this Country is not about Big government nor will they understand that more bailouts, ( or excuse me now referred to as "American Recovery and Reinvestment Plan," ) is only going to expand and lengthen this depression.

    January 8, 2009 12:31 pm at 12:31 pm |
  18. Libs be dopes

    Like it or not he is the PE. I did not vote for him as I'm against socialism.

    Big picture, wipe the slate clean, give him a chance and lets see what he can do before we start criticizing him.

    His biggest problems will be with the Big Dog Dems (Reid, Pelosi, Feinstein, Clinton) rather than the Repubs.

    If he falls flat on his face he will be unemployed in 2012.

    January 8, 2009 12:32 pm at 12:32 pm |
  19. :o

    We are with you Barack. Do whatever it takes. The country is with you.

    January 8, 2009 12:32 pm at 12:32 pm |
  20. AJ

    sigh – read the speech...
    the man is not speaing to fear at all – he is speaking past it to your ability to be resolute in the face of a crisis and move forward

    he isnt using the economic crisis to go attack someotherstan or siphon funds into programs that would benefit his buddies...

    he is spending money on healthcare, tax cuts, education, technology...

    and quite honestly...if he scares u into thinking that this is a good thing then more power to him...

    January 8, 2009 12:33 pm at 12:33 pm |
  21. Trish - PA

    Jan, you idiot. these arent teleprompted speaches. They are his ideas and plans for the future that he is relaying to the public. Geez. Some of you will stop at nothing to say something negative about him. Even if it makes you look like a moron. And some of you are posting about fear tactics? What on earth are you talking about? that doesn't even make any sense? What fear tactics? Are you denying that we are in a recession? Someone had better start talking about it before we are all in the poor house. Our current poor excuse for a president certainly hasn't been talking about it. Fear tactics?? Give me a break! Look the word "fear up" in the dictionary before you go posting your hateful, negative garbage. You aren't even making any sense!

    January 8, 2009 12:33 pm at 12:33 pm |
  22. :(l

    @Puff,

    Got jealousy?

    January 8, 2009 12:33 pm at 12:33 pm |
  23. MD

    John Galt has already left the country.

    Obama's plan for the ecomony in an abridged version is:

    Spend...spend...spend...tax...tax...tax...spend...spend...spend...tax...tax...tax...spend...spend...spend....tax....tax....tax...spend...spend...tax...tax...tax...spend...spend...spend...tax...tax...tax...spend...spend...spend....tax....tax....tax...spend...spend...tax...tax...tax...spend...spend...spend...tax...tax...tax...spend...spend...spend....tax....tax....tax...spend...spend...tax...tax...tax...spend...spend...spend...tax...tax...tax...spend...spend...spend....tax....tax....tax

    January 8, 2009 12:34 pm at 12:34 pm |
  24. Rob Stumpf

    When someone blames George Bush for the subprime bubble you immediately know that person doesn't know what they are talking about. The President isn't responsible when banks and lenders go on an orgy of irrseponsible credit, unless you think the federal government should approve of every loan made. EVen the craziest of liberals don't think that (I hope).

    Obama's plan is the same as Bush's, really. Bush spent about $1 trillion, so will Obama (initially!). But of course when Obama does it, it's a great plan, if Bush did it is was a complete failure. But it's really the same thing.

    The best thing for us to do is really as little as possible. We are going to have pain anyway, that's the nature of any recession. They happen under Presidents of both parties and they are unavoidable. But people foolishly demand that we "do" something, that some plan is better than no plan! Which is like saying that taking poison for a cold is better than taking nothing at all, you're "doing" something, right?

    January 8, 2009 12:37 pm at 12:37 pm |
  25. Joan

    William,

    Did you hear the same speach I did? Obama did address the energy issue. Do you really think the car industry can turn on a dime? And do you really think that can be a QUICk fix for a CRISIS.

    January 8, 2009 12:39 pm at 12:39 pm |
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