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. TJCYNIC

    If B.O. becomes nothing more than the political Body Odor that is coming out of Illinois, we will be on him as we were on the current shrubs in the White House. If the Stars and Stripes begins to morph
    into the hammer and scycle or some other international symbol we will be on them as white on black.

    January 8, 2009 01:06 pm at 1:06 pm |
  2. An American

    America needs real solutions to our problems, not fear mongering! We are all well aware that our economy is in big trouble, and we are also well aware of how we got there and just who put us there. Time to punish the people that did wrong things and got richer for it and are making the rest of us suffer for it. We should not be bailing these irresponsible criminals out of trouble. Also, if car company's etc. are facing foreclosure, then so be it. Hell, many private citizens have had to face foreclosures – look at the housing market. And still no fix for that. Throwing good money after bad and letting these bums get away with screwing us and make then "ok" is not the way to go. Change Obama – I want to see the change you promised all during your campaign. Now is the time to see what you are made of.

    January 8, 2009 01:07 pm at 1:07 pm |
  3. daniel cabrera

    Obamas',… 'rescue package', 'simulus', 'recovery thing', WELFARE (that is what it really is, so do not fool yourself),…anyway anyone wish to call it is just a dumb move. It will just DRAIN TO THE VERY BOTTOM AND BEYOND! ALL THE TAXPAYERS RESERVES ,…and then,…..TA_DAAAA!!!! KABOOM! America is out of juice!

    At this point ,…( not far from now) – SOCIALISM IS ALREADY TAKEN OVER ALL.
    Well, people that is what you did bargain for ,…so since there is not a TIME MACHINE to go back in TIME and undo things,…. we are all in the same ship,…better said,…SINKING SHIP !,,,got that? I am very sure you did.

    And do ot let me start with national security related topics and some other things,..that, is for the future if we ever have one.

    Sleep well,
    sincerely,
    Daniel Cabrera
    Merrillville, Indiana

    January 8, 2009 01:07 pm at 1:07 pm |
  4. Matt

    @ Libs be dopes

    Really? You're against socialism? Do you refuse to pay your taxes on principle then? After all, we already have a graduated income tax and have had one for a VERY long time and taxes are, by definition, a redistribution of wealth.

    January 8, 2009 01:07 pm at 1:07 pm |
  5. David

    When Bush pushed his economic recovery package they called it a “waste of money”…”it would not work” …”deficit spending”…”you can’t buy my vote”.

    When Obama pushes it they say “great plan”…”he’s going to help the common folk”…”great leader”

    Double standard. No doubt.

    January 8, 2009 01:09 pm at 1:09 pm |
  6. Ray F.

    Where was all of this "questioning" of the President over the past eight years? I love when people go after a man who hasn't even taken the oath yet, but sit quietly by for EIGHT YEARS as this country went down the toilet in every way possible.

    To the Republicans out there, I just want you to remember one thing: George W. Bush was YOUR President. He represented your party...you were proud to have him...so jumping ship during the past year doesn't clean away the crap no matter how many times he and Dick try to rewrite history. It's nice to see again that we have the potential to move beyond fear and hatred and onto something better.

    Of course, we could just stay on the course we've been on for the past eight years...and start a big country-wide yard sale because that's what it's going to come down to. Hmmm...I wonder what the Chinese would be willing to pay for some small town in Nebraska?

    January 8, 2009 01:09 pm at 1:09 pm |
  7. B.O by any other name is still b.o.

    @J in NJ and Ron Stumpf

    You both are so right!
    Amazing how little people know about history and recessions and what should be done, (nothing, the economy goes through these naturally and if messed with, prolongs or worsens the result).

    I thought people said Obama was intelligent???
    I think he's listening to the wrong poll and when it backfires on him, just blame someone else as usual.

    January 8, 2009 01:09 pm at 1:09 pm |
  8. abc

    one can only laugh at these biased and partisan views in a time of such great crisis. we have more than one party in America and GOP lost and then deal with it! another reason i'm an independent. it's always easier to attack with malignant thoughts than use our wise brain to contribute (by spending less than you earn) and work on solutions that work.
    why our country is no longer and possibly, will no longer be leading the world is because we act open minded when in fact we are quite prejudice on all levels. meanwhile, other countries are doing their best to open their minds and putting aside their personal political differences to withdraw themselves out of this recession crisis ASAP. keep fighting the no-good, petty believes... while the rest of us do have a brighter, promising future... so much more to live for than live and think like Uncle Scrooge.

    i love my country and i will give my faith to our new president and hope he won't disappoint us like many of his predecessors :)

    January 8, 2009 01:09 pm at 1:09 pm |
  9. Al

    Recessions are the end result of a psychological meltdown from overspending and eventually correct themselves once rational thinking overtakes irrational action. Until that happens, it wouldn't hurt for our new president to steer industry and commerce into an environmentally cleaner direction. That, in turn, would lead to a healthier population with more usable earth years for future generations.

    January 8, 2009 01:09 pm at 1:09 pm |
  10. Griff

    Anyone "Can" talk..... The Loser!!!!! Guaranteed to Failure.....
    The Preach/Speech...

    January 8, 2009 01:09 pm at 1:09 pm |
  11. sg

    I'm still waiting for everything to be all better since Obama was elected. Maybe this guy was overated long ago. Won't tune into his address tonight – Just study the New Deal since that's all he seems to have to offer us. What a joke!

    January 8, 2009 01:12 pm at 1:12 pm |
  12. Kevin B

    MR Stumpf – The way it works in any chief executive position is if you are the chief executive when things go wrong, you take the hit. (It is call accountabilty) This is the president' Bush quandry.

    No matter what is said about others complicity, the american public will always stick the economic mess to GWB, this will be his legacy and there is no getting around that fact.

    January 8, 2009 01:14 pm at 1:14 pm |
  13. Dave

    Enough with the Chicken Little "sky is falling" speeches. Put some specifics in front of the Congress and the public and get things moving. For all the comparisons to FDR, I don't recall that in my history education that he made speeches while waiting for ideas from Congress.

    January 8, 2009 01:14 pm at 1:14 pm |
  14. Chipster

    Rick in WA, et.al.

    I love seeing conservatives arguing that for more government regulations! Relaxing the regulations was certainly a mistake. Politicians never seem to learn that privileges will be abused if the rules don't specifically prevent it. Yes, it was a good idea to make it possible for people to buy homes but it didn't occur to our leaders, conservative or liberal, that financial institutions and Realtors would actually encourage people to take on far more debt than they could afford. It's easy to see it in retrospect. It's biting them all now but regulations are still being resisted.

    January 8, 2009 01:14 pm at 1:14 pm |
  15. Venia

    Hey rethuglican trolls, here's a thought for ya And I quote
    "INTRODUCTION TO GOP FISCAL POLICY

    - To spend one trillion of US tax dollars rebuilding and providing security, jobs, education and health care for the people of Iraq is "sound economic policy".

    - To do the same for the people of the United States is "socialism".

    Aloha."

    January 8, 2009 01:15 pm at 1:15 pm |
  16. Steve in Las Vegas,NV

    Lets give PE Obama a change to do his work before the comments start. BUSHCO's policies have helped creat this mess by doing away with regulations and oversight in the financial and banking world. They have given BILLIONS to them without oversight as well.

    Why was there NO oversight in the financial & banking world??? HUGE profits from BAD loans and mortgages, and now we all see the wreckage from it....The economy in the toilet and going down.

    Hopefully there will be accountability and regulations to prevent this kind of thing. Obama & CO will have their work cut out for them, so give them a chance to get it done, and get back to the basics.

    January 8, 2009 01:16 pm at 1:16 pm |
  17. Venia

    Can you all imagine if mccain (clueless) and palin (pathological liar) had won? THis country would be destroyed.

    January 8, 2009 01:17 pm at 1:17 pm |
  18. sg

    So Obama – I work in high technology and I'm losing my job at the end of Feb. What does this do for me?? Do I need to learn HVAC or go get a CDL so I can drive a truck for one of your infrastructure jobs?

    January 8, 2009 01:17 pm at 1:17 pm |
  19. steven

    Thank goodness we have an advantage-maker in Obama to lead us out of fear and failure that is rocking the economy.

    All the naysayers are expected even as their motivations are understandable and driven by fear.

    I hope the media will encourage rather than lead only with what bleeds.
    The easiest thing for all of us and the media is to spot what is problematic, it sells more for the media, even if it produces nothing of enduring and redeeming value.

    We must support and get behind President Obama and his team now.

    January 8, 2009 01:18 pm at 1:18 pm |
  20. Farrell, Houston, Tx

    The economist all agree with Obama. We've had 8 years of nothing being done that got us in this mess that keeps going down hill. LET'S MOVE THIS MOUNTAIN WITH OBAMA TO PUT OUR COUNTRY FIRST.

    January 8, 2009 01:18 pm at 1:18 pm |
  21. yellow dog democrat

    me thinks that the education system and manners is mighty lacking in this great country of ours! get with the program or perish--all other great and mighty empires have failed before – because they were too status quo and didn't see the forest for the trees -

    January 8, 2009 01:20 pm at 1:20 pm |
  22. rodlang

    Obama fear mongering on the economy reminds me of Dubya fear mongering on WMD in Iraq. Let's hope we don't make another mistake due to fear. Even FDR said we have nothing to fear but fear itself.

    January 8, 2009 01:22 pm at 1:22 pm |
  23. legal in nc

    He better check with Harry Reid before he promises anything........If Reid don't agree,,, then Obama must flee!

    If more spending was the answer then we should already be out of this economic mess. The billions of dollars already spent by both parties have not stabilized the market so what makes the "wonderful reader of speeches" believe that because he's reading the words that somehow they will come to light.

    And as far as you people that hate Bush then you as well should hate this idea because it's the same as your current President. LOL LOL

    January 8, 2009 01:22 pm at 1:22 pm |
  24. JFB

    Clearly, hardly any of you know what the heck you're talking about, but thank you for the entertaining posts.

    January 8, 2009 01:26 pm at 1:26 pm |
  25. Lucius Montegue

    Obama is trying to treat the economic downturn like it is a depression. It is a recession only. I read that FDR tried so many government fixes back in the 30's and the country just fell into depression. It was WWII only that got us back on our financial feet. Obama thinks He has the answewr to everything; he does not - he does not even understand the rudiments of our country having been brought up until about 10 years old in a foreign/muslim household.

    January 8, 2009 01:29 pm at 1:29 pm |
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