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. closet republican

    folks, capitalism is officially dead...

    January 8, 2009 01:56 pm at 1:56 pm |
  2. Al

    Interesting. We have citizens swooning over the great speech by Obama in which he proposed to spend this country into oblivion on the pretense of getting the economy out of a recession but admitted during the same speech that his plan would not work.

    I just don't get it.

    January 8, 2009 01:57 pm at 1:57 pm |
  3. Tim

    There are two presidents at a time, unless I don't feel like anwering any questions, then there is just one president at a time.

    January 8, 2009 01:59 pm at 1:59 pm |
  4. christi

    To Break Down the Numbers: As far as the Chinese government "owning" us in four years? I suspect you are a little behind. They have owned us for the last several years thanks to the current administration.

    January 8, 2009 02:00 pm at 2:00 pm |
  5. Puff

    He speech is total socialism. That's what you obots voted for and now you are going to get it. Why don't you all move overseas where they like that type of government and leave us to our Capitalism.
    Oh yeah and take BO and MO with you.

    January 8, 2009 02:00 pm at 2:00 pm |
  6. Joan

    break down the numbers,

    tax cuts are only part of teh proposal. Nobody has said that the tax cuts will fix the problem. We know they won't. It's the jobs that will help, combined with tax cuts. I think the tax cuts are mostly to get the repubs on board. It's too bad we still have to compromise to their stupidity.

    January 8, 2009 02:01 pm at 2:01 pm |
  7. Angie

    Thank you PE Obama. At least you know there is a problem with the economy. the repubs didnt seem to think so. hmmmmmmmmmmmm
    People losing their jobs and homes. And those stupid arrogant repubs thought the economy was sound. So my hat is off to you for having the nerve to try and get this economy going. Can't wait for the DC idiot and crazy cheney to BEGONE FOREVER.

    January 8, 2009 02:03 pm at 2:03 pm |
  8. Oh! The Irony

    William Isely January 8th, 2009 12:28 pm ET

    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.
    -----------------------

    HAve you been in some type of hiding? Obama's addresed this "major root" for almost 2 years now.

    January 8, 2009 02:07 pm at 2:07 pm |
  9. Kevin B

    Break down the numbers January 8th, 2009 1:43 pm ET

    "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 above statement is misleading because this is only a portion of the overall plan. It will take targeted tax cuts and spending cuts (belt tighting) coupled with smart investments, i.e. education, infrasructure, green tech, IT.

    I wonder if you received any great benefit from the Bush tax cuts or are you just spouting talking points from AM radio

    January 8, 2009 02:08 pm at 2:08 pm |
  10. Griff

    Investment Plan????? Great Words,,,,, Nearest Swamp....
    Who/Where do you invest??? If you can't sell your Goods.....
    Nobady will buy from America... No Guarantee on After Sales Service.....

    January 8, 2009 02:11 pm at 2:11 pm |
  11. Def Prolyphiq

    ...I dont know why I even bother reading comments anymore. Ignorance is bliss.

    However, you know what is refreshing, is the fact I can finally take interest in politics again. For the last 8 or so years, everytime Bush got on stage to talk (even about important issues) I would try to decipher whatever it was he was trying to say, give up and turn the channel.

    Lets also remind ourselves that Barak Obama is just a man and not God. There is no conceivable way any one person can answer every question this country faces (well...with the exception of all the endless drones of finger pointing, hate spreading comments on this page), BUT I think he's built a fairly solid team of advisers to try and turn the tide.

    Does Washington absolutely know if this is going to fix a major problem? Do you? Ofcourse not....nobody can tell or predict the future period. The best anyone can do is make the best possible decision, then learn what works and what doesnt.

    Good thing is, I think they already have a clear idea of what DOESNT work, thanks to the Bush administration trying this before, though this time around accountability will be key.

    January 8, 2009 02:11 pm at 2:11 pm |
  12. Griff

    Praise the Idiot and your comment is welcome... Tell the truth and it Ain't.... Yes America that all Obama needs Praise,,,,, Your going down America.... I know Busineses I was in After Sales Service....

    January 8, 2009 02:14 pm at 2:14 pm |
  13. Sandy N. von Kaldenberg

    I have heard a suggestion made that the President should propose a sixty day window of opportunity allowing Americans to buy American made products with a 30% tax rebate limited by the level of their personal income tax returns. This in my opinion would stimulate the economy by increasing spending and address the probable loss of employment caused by the recession as well.

    January 8, 2009 02:15 pm at 2:15 pm |
  14. shoegazer

    ahh...that speech is too long to read

    January 8, 2009 02:16 pm at 2:16 pm |
  15. Jack - DSM, Iowa

    Nothing against Pres-elect Obama, after all I did vote for him, but where the hell is President Bush? He still is the President. Has anyone seen him other than a few photo ops lately? Has he abandoned his responsiblities and just coasting until the 20th?

    We have a President who should still try to lead – and won't, and a President-Elect who can't lead us yet – and is trying.

    January 8, 2009 02:17 pm at 2:17 pm |
  16. Antony

    These republicans do not know what to do when they see real leadership. They are not used to seeing efficiency, a coherent President, and fluency in speech. They just can't handle the fact that Obama is outdoing the past three presidents in every facet So, I suggest the pepubs or these critics that sound so intellectually challenged to read the speech again and probably hire someone to translate it for them. Oh wait! President Obama will be reforming No Child left behind". Lucky for them.

    January 8, 2009 02:18 pm at 2:18 pm |
  17. Michael, Houston Texas

    Puff I will ignore your idiocy. Okay to topic: I don't know who you are, Break Down the Numbers, but well put. $500 is not a real savings at all. Someone on here touched on the real problem. You see folks, we are paying the price today for something that started in the 70's. This notion of trickle down economics just does not work. What does not work either is socialized government. The problem is, Americans have a sense of entitlement. Let's take a look at the housing crisis, this notion that every American should own a home. Well, true but not every American is capable of that type of responsibility. As for the stock market, it's not crashing, it is correcting itself. For so long, everything has been overstated and inflated. That's why back in August (I think in August) 1 Trillion disappered. Why? because it was never there in the first place, it was the perception that it was there. so why is American struggling. Because we don't make anything anymore. We buy from other countries. We borrow money to spend on things that we cannot afford. When we have a national problem, we throw money at it i.e. Hurricane Katrina victims. And the kist goes on. What we need to do as a country is first start inside our four walls. Teach our kids, better our education, live within our means, work hard, reclaim our morals, hold our elected officials accountable instead of making excuses for them. Cut out all these bitterness and hatred for each other and get back to being an American instead a Republican, a Democrat, a liberal, a conservative, being white, black, hispanic, asian etc.

    January 8, 2009 02:18 pm at 2:18 pm |
  18. JB

    Geez, one thing you can surely say about the bush admin – it's brought out the bigots and cynics. Give Obama a chance to get in office – things surely can't get worse than what bush has done.

    Man repubs are bitter people! What's wrong with you?

    January 8, 2009 02:21 pm at 2:21 pm |
  19. Antony

    Jan: when will he answer real questions instead of making teleprompted speeches?
    ***********************************************
    This is why we need to reform our education system and No child left behind since it is leaving the brains of people like you behind. Grow up.

    January 8, 2009 02:21 pm at 2:21 pm |
  20. President OBlah blah

    I hope our new President stops telling us how bad the economy is and just starts trying to fix it. If you haven't noticed, in 12 of the most recent press conferences he has given he reiterates the theme – that he is being handed a messy situtaion - well, welcome to the grown up job. Stop making excuses, and stop postering for your reelection bid -when in 4 years you will be saying we are still in a mess but it is not my fault – it was Bush -- Time to step up, undo the bra strap, and be a man and just do the job

    January 8, 2009 02:22 pm at 2:22 pm |
  21. Len

    sg....

    I guess you would rather have another right wing conservative in office who will not do anything to rebuild America. Just remember who has been in office for the last 8 years and who has basically destroyed our country....If we all do not work together and support our newly elected president, who has done more to address our probelms since he was elected than the current administration, our children, grandchildren will be in big trouble.

    yes sg....we must all sacrifice!

    January 8, 2009 02:24 pm at 2:24 pm |
  22. arc, Lugano CH

    Puff January 8th, 2009 11:28 am ET
    Here he is begging and fear mongering.
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    When the Republican 'Arab O'Terror' meter was turned to orange at the whim of the Bush administration, you jumped under your couch and hid like a pathetic coward. Why? Because the survival of the GOP depends on the stupidity of Conservative Less-Than-Humans like yourself, leper. The GOP is begging you to stay the intellectual equivalent of raw sewage. They love folks like you.

    The President-Elect’s speech was quite good.

    January 8, 2009 02:24 pm at 2:24 pm |
  23. kayla

    IT AMAZES ME, THAT THE REPUBS. ARE WATCHING PRESIDENT ELECT OBAMA LIKE A WATCHDOG. MAYBE, THEY SHOULD HAVE DONE THAT WITH BUSH. WE WOULD NOT HAVE BEEN IN THIS MESS THEN. LOL

    January 8, 2009 02:28 pm at 2:28 pm |
  24. Mesa

    Right now the pressure is not on him. He still has time to think before he reacts. Let's hope he can do the same when a million and one problems are coming at him all at once.

    January 8, 2009 02:31 pm at 2:31 pm |
  25. big D

    The economic problem in America is the people itself. I know more people that are looking for an EASY way out, then actually looking for a REAL job. There's plenty work out there, only a few of us are willing to do the work.

    As for the economy, again its the peoples fault. We allow our government to spend millions of dollars locking up our NON-VIOLENT, troubled youth for years upon years. I have a non-violent, drug free, VERY intelligent, brother serving 20 years for distributing drugs. We shouldn't be wasting money on locking 'em up, we should be putting these valuable individuals to work.

    January 8, 2009 02:33 pm at 2:33 pm |
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