January 8th, 2009
11:23 AM ET
5 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. paul

    come on you people know what Obama say is true what has got us here is greed , taking all you can and not caring who or what it does to the country or to people. people go in to the military to serve there country and they have pride in doing that .you would think people of this country would have a little more pride for there country

    PAUL

    January 8, 2009 01:29 pm at 1:29 pm |
  2. John

    Give Obama a chance to do the job! He is thoughtful, analytical, and will proffer a meaningful remedy to solve all the problems over time. Our situation get like this over night and the likes of Bush, Wall Street, and greedy Americans have hurt this country for years to come! Unlike Bush and company, he will meet the challenge head on. There will have to be big government money invested in the problems and it will take time.

    The US has been a house of cards and like the Roman empire we've self destructed!

    John (Orlando, FL)

    January 8, 2009 01:30 pm at 1:30 pm |
  3. yellow dog democrat

    TO: Get Serious! January 8th, 2009 12:07 pm ET
    So then why didn't President "W" Bush do something about it he had 8 years!! just buried head in sand and took bad advice about IRAQ???

    January 8, 2009 01:30 pm at 1:30 pm |
  4. Army Vet

    What cracks me up is that liberals have this idea the one man got us into this mess and only one man will get us out. Get your heads out of the sand. Gob Bless George Bush and David Petraeus for President 2012!!!

    January 8, 2009 01:31 pm at 1:31 pm |
  5. RJ, Phoenix

    "Why dont you give each family enough to pay off their mortgages and some bills"
    ______________________________________________________
    Are you serious?!?
    Where do you think this money comes from?
    It's called TAXES you idiots.

    Stimulus checks are nothing more than loans which you WILL pay back through higher taxes in the future.

    January 8, 2009 01:31 pm at 1:31 pm |
  6. Is it Jan 20th yet?

    It so nice to have a President (ok, President-Elect, but whatever) who makes decisions and policies based on analysis and understanding of problems and their causes instead of just blindly following some idealogy.

    January 8, 2009 01:32 pm at 1:32 pm |
  7. the truth

    CNN how come you are not posting anything about the Coward Israelis killing the innocent kids in Gaza how come you are not saying anything about that ? or are you too scared because the media is owned by the jews? shame on Israel the whole world sees their true coward colors

    January 8, 2009 01:33 pm at 1:33 pm |
  8. Amber

    S Callahan –

    There is certainly a Way, but there must also be a way.
    We need to render unto Caesar that which is Caesar's, and render unto God that which is God's.

    An economic revival without a spiritual revival is gray and lifeless, but a spiritual revival without an economic revival is call a Dark Age.

    January 8, 2009 01:35 pm at 1:35 pm |
  9. Joan

    worried mom,

    I believe that Obama is planning to use some of the 350 billion of financial bailout for mortgage relief. If they done this earlier, before the credit freeze, we wouldn't be in this situation.

    However, his other plans, we hope, will keep the econonmy going and help you to keep your job.

    January 8, 2009 01:36 pm at 1:36 pm |
  10. ga.

    they need to tell us what happened to our bailout money??? GIVE IT TO THE PEOPLE SO WE CAN PUT IT BACK INTO THE ECONOMY.

    January 8, 2009 01:37 pm at 1:37 pm |
  11. Furey

    Good Speech, Barack!

    America shall overcome this crisis under your good inspiration by the grace of the Almighty God.

    Keep the Wheel strong, better days are ahead when American citizens start seeing the first incomes of this genuine economic programme.

    January 8, 2009 01:40 pm at 1:40 pm |
  12. Laverne

    We are with you Mr. President. At least Obama consults with all his economic team to come up with solutions and it is not just a one or two man show. One thing us Americans must remember is TOGETHER WE STAND AND DIVIDED WE FALL! Please give our new president a chance, he deserves that much!

    January 8, 2009 01:43 pm at 1:43 pm |
  13. Break down the numbers

    Give me a break! If anyone thinks that Obama's tax cut of $500 per person is going to save the economy, then he is much more stupid than we give him credit for. Let's break down the numbers. $500 breaks down to about $9.60 a week. So Obama is cutting our taxes by $9.60 a week. Now, depending on what tax bracket you are in, that translates into a very small amount of money that is actually going into your pocket. The average American makes about $46,000 per year, which places him or her in a 25% tax bracket. So, taxes on $46K is about $11,500. With Obama's tax credit of $500, then your tax is based on $45,500 which comes out to about $11,375. The difference is $125 in tax savings or $2.40 a week that actually goes into your pocket. Now, I realize this is very simplistic, but think about it. Just how much can $2.40 a week buy you and your family and is this really the best thing to save the American economy. Trust me. In 4 years, when the American people have the opportunity to fire Obama and get a president who knows a little something about the economy, we'll all be wishing we had voted for Hillary and we won't be wondering why the Chinese government owns the US.

    January 8, 2009 01:43 pm at 1:43 pm |
  14. Joan

    sg,

    part of the stimulus package is for technology, especially for health records, government, schools, etc. start looking there. I guess you didn't hear all the speach??

    January 8, 2009 01:44 pm at 1:44 pm |
  15. No Hillary = No Obama

    This is going to be my ongoing problem with Obama: Because he is so invested in his image and wants to retain his rock star status – everything that looks like it will create a barrage of criticism for him, he will preempt. I just don't trust someone who got where he is because of media hype, sexism, and hollow slogans.

    January 8, 2009 01:45 pm at 1:45 pm |
  16. Missouri

    CHANGE. Yep, it isn't going to be easy and it is going to cause alot of skepticism just in the thinking of it, much less the process of it. Some jobs will not be there, and some, maybe many of us are going to have to change what we do, when we do it and accept it because we cannot have it like it used to be or HERE is again where we will end up. It is normal to fear what we don't know but getting to know it can be an exciting ride too. It is always ok for change as long as our own sacred cow isn't touched, too. Nonetheless, some cows are just not all that sacred, or healthy for all the people. Did anyone say this is going to easy? Did anyone say we will make the changes so the people don't have to? The majority voted for Obama. Obama is doing exactly what we voted for. Let Go of the OLD, folks, and Get on the New Horse in Town, or eat the dust you will be miserably left in. It is up to each of to decide where we want to end up.

    January 8, 2009 01:47 pm at 1:47 pm |
  17. walleye

    What a great speech. He explained the problems and solutions in a way everyone – including Republicans can understand. Now lets follow through with this plan by backing the plan of our new POTUS to get this country rolling again. I believe when history looks back they will say WOW – Great Job Barry.

    January 8, 2009 01:47 pm at 1:47 pm |
  18. Joan

    Lucius,

    It may be a recession only as far as the stats. go. By the time we find out it's a depression, it will be too late. In case you haven't noticed, we are already in a war with big, big, spending. Do you think we should wait for another one? Criticism is fine, but were's your plan??

    January 8, 2009 01:47 pm at 1:47 pm |
  19. senator

    Lucious M what planet are you from and when and where did you see or read that PE Barach Obama was brought up in a muslim household up until ten years ago, you idiot.

    January 8, 2009 01:48 pm at 1:48 pm |
  20. JDC

    I fail to understand how we can dig our way out of a hole by DIGGING IT DEEPER!

    January 8, 2009 01:48 pm at 1:48 pm |
  21. Barry

    It’s SNAFU all over again. Presidential Elect Obama placates consumers and corporate interests that purchase or market frivolous luxury commodities and service oriented excesses. What you can do for your country seems to be a forgotten stump phrase and his January 8 speech makes a poor argument for effective and economically constructive use of America’s treasury. A $1000 per family giveaway to 66% of American families who are still employed and financially stable will do nothing more than promote America’s egocentric misconception that excess consumer consumption is the cornerstone for constructive economic recovery. Economic stimulus should be limited to unemployment benefit enhancements and constructive job creation initiatives that promote industrial expansion, infrastructure enhancement and technology for product export and power consumption efficiencies.

    January 8, 2009 01:49 pm at 1:49 pm |
  22. closet republican

    Like every great dynasty, America's reign might be about to end. A new empire will emerge.

    January 8, 2009 01:52 pm at 1:52 pm |
  23. Scott

    You want Americans to stimulate the economy? Eliminate the payroll taxes! We earned it through hard work, it's hign time for the politicians to keep their money grubbing hands out of our wallets.

    January 8, 2009 01:54 pm at 1:54 pm |
  24. John

    President Obama, that's why we elected you to change the way we have been managing our economy in America and I want to let you know, I fully support you!

    January 8, 2009 01:54 pm at 1:54 pm |
  25. Susan Buric

    There are so many cuts the governent that could do , that I
    think most of the population who have managed their own funds well could also review government spending and start making a financial improvement. Example– Does the white house really need a new set of dinner ware for 450000.$. Why don't we put a permanant stop to ALL pork barrel spending. Why are most of goverment agencies not following the law. Why are large businesses who have caused these problem not punished. I worked in the mental health system for 16 years. I reported the waste to the Govenor, the medicaid regulator and the FBI and they did believe me, but couldn't do anything about it. I could go on for days to suggest spending cuts
    Maybe a the government dinners they could eat bologna sandwishes like the rest of us do.

    January 8, 2009 01:54 pm at 1:54 pm |
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