President Barack Obama on Tuesday acknowledged public outrage over bank bailouts and misspent federal dollars, but made an urgent pitch for continued spending as a way out of crushing recession.
In a nationally televised address to a joint session of Congress, Obama said “it’s not about helping banks” but about helping people and the economy.
“I know how unpopular it is to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions. I promise you — I get it,” Obama said. “But I also know that in a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment. My job — our job — is to solve the problem.”
The speech began 17 minutes after its scheduled 9 p.m. start and was punctuated by enthusiastic applause by both Democrats and Republicans. The historic address, the first by an African American president, lasted 52 minutes.
With no prospects for a quick economic turnaround, Obama cut a balance between tempering expectations for the future while still offering hope the economy will get better.
“I intend to hold these banks fully accountable for the assistance they receive. And this time they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer,” Obama said. “This time, CEOs won’t be able to use taxpayer money to pad their paychecks or buy fancy drapes, or disappear on a private jet. Those days are over.”
His leap-of-faith economic program calls for accelerated federal spending and deeper budget deficits as a means to spur the economy. To make the deal more palatable, the president plans spending cuts in defense and will allow his predecessor’s tax cuts for wealthy Americans to expire.
“Everyone in this chamber — Democrats and Republicans — will have to sacrifice some worthy priorities for which there are no dollars,” Obama said. “And that includes me.”
His budget, to be released on Thursday, follows a series of bailouts for the financial industry and automakers that have so far not been well received by the American people. On the auto rescue, Obama said, “I believe the nation that invented the automobile can’t walk away from it.”
He has also already pushed through a massive stimulus package of federal spending and proposed a rescue program for homeowners facing foreclosure.
Speaking at the close of a day that brought news of Northern Trust, a $1.6 billion beneficiary of federal bailout funds, sponsoring a lavish getaway for hundreds of employees and clients less than two weeks ago, Obama recognized deep distrust of government programs.
“I know there are some in this chamber and watching at home who are skeptical of whether this plan will work,” Obama said. “I understand that skepticism. Here in Washington, we’ve all seen how quickly good intentions can turn into broken promises and wasteful spending. And with a plan of this scale comes enormous responsibility to get it right.”
To assuage concern about lack of oversight for the billions of federal dollars going out the door, Obama announced that Vice President Joe Biden will monitor federal spending programs, saying, “Nobody messes with Joe.”
The president used the speech to begin shading in detail on some of his budget-cutting promises, saying his blueprint will end some farm subsidies, no-bid defense contracts, Medicare fraud and tax breaks for companies outsourcing jobs overseas.
Obama claimed his budget office has found two trillion in savings over the next 10 years. He has promised to cut the deficit in half in four years.
“My budget does not attempt to solve every problem or address every issue,” Obama said. “It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession.”
The president said he had three top priorities in the coming budget: energy, health care and education.
The president is asking Congress for a cap on carbon emissions and promising a $15 billion annual investment in renewable energy technology and development.
He restated a call for comprehensive health care reform, and said next week’s planned White House summit on health care reform will be the official start of work on the issue.
On education, Obama said his budget will include pay incentives for teachers and more funding for charter schools. Saying too many students drop out, Obama set a new goal for the U.S. to have the highest percentage of college graduates in the world.
