Obama Emphasizes Reform, Offers Hope Amid Economic Crisis

By Ben Pershing
Tuesday, February 24, 2009 6:26 PM

Five weeks into an administration already marked by dramatic highs and lows, President Obama sounded a note of hope at a time of crisis tonight, delivering an address to a joint session of Congress heavily focused on the ailing economy and how to fix it.

Offering the prospect of a brighter future after weeks of grim rhetoric, Obama sought to put a human face on complex policy proposals. He linked his banking rescue plan to the ability of a "young family" to "finally buy a home." And he acknowledged populist anger at the prospect of more Wall Street bailouts, vowing to crack down on CEO bonuses and conduct tough oversight of the hundreds of billions of dollars already pledged to address the economic crisis.

Though he began by recognizing that "the impact of this recession is real, and it is everywhere," Obama said he sees light at the end of the tunnel, despite rising unemployment, a cratering stock market, teetering banks and an auto industry gasping for breath.

"But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before," Obama said.

Though he was optimistic, Obama mostly avoided flights of lofty rhetoric. He offered specific, sometimes wonkish explanations of how credit markets work, how the budget should be reformed and how the country can renew its commitment to renewable energy.

Obama demanded quick action on several fronts. On finance, he asked Congress to move with dispatch to "reform our outdated regulatory system." On health care, he said "reform cannot wait, it must not wait, and it will not wait another year." And on education, Obama said his budget would speed the pace of reform and "expand our commitment to charter schools."

He pledged more honesty and transparency in the budget process, saying that "No longer will we hide" the full cost of the war in Iraq and Afghanistan. Obama vowed to "be vigilant in upholding the values our troops defend" and said of detainees, "I can stand here and say without exception or equivocation that the United States does not torture."

Obama's speech, with all the trappings of a State of the Union address, comes a day after a bipartisan "fiscal responsibility summit" at the White House and two days before the presentation of his first budget.

Obama fleshed out the details of an economic strategy that some critics -- and the markets -- have tarred as too short on specifics to inspire confidence. A week after the president signed a $787 billion economic stimulus package, his administration is moving on separate fronts to shore up the housing market by stemming foreclosures and bolster the banking industry, possibly by purchasing shares in the banking industry.

After days of mostly negative news, Federal Reserve Chairman Ben Bernanke offered a glimmer of optimism today by testifying that 2010 could be a "year of recovery." The stock markets rallied on delivery of that prognosis, and Obama sought tonight to strike a similarly upbeat tone.

"The weight of this crisis will not determine the destiny of this nation. The answers to our problems don't lie beyond our reach," Obama said.

"What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more."

But Obama also distributed some blame for the economic crisis.

"We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election," he said. "A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway."

Obama hailed the enactment of the stimulus measure, prompting a partisan split in the applause -- Democrats in the chamber clapped loudly while most Republicans remained silent. The president said he had pushed for the bill "not because I believe in bigger government -- I don't. Not because I'm not mindful of the massive debt we've inherited -- I am." Rather, Obama said he pushed for the stimulus, which he said would create 3.5 million jobs, because otherwise the economic situation would be even worse.

Obama added that he had asked Vice President Biden "to lead a tough, unprecedented oversight effort -- because nobody messes with Joe."

And Obama drew a strong reaction from both sides of the aisle by vowing to strictly monitor financial institutions that receive government aid. "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," he said. "This time, CEO's 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."

Obama reiterated his desire to cut the federal budget deficit in half by the end of his first term in office, calling for sacrifices by all stakeholders and saying his team has "begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs." At one point, Obama drew Democratic applause by referencing "the deficit we inherited."

Obama drew a more bipartisan demonstration when he invoked Sen. Edward Kennedy (D-Mass.), who has been undergoing treatment for brain cancer. Supreme Court Justice Ruth Bader Ginsburg, who is battling pancreatic cancer, also got a big round of applause upon entering the chamber, as did Secretary of State Hillary Clinton, who recently returned from an official tour of Asia.

Obama delivered his address from a position of strong political advantage. A Washington Post/ABC News poll released Monday showed that 68 percent of respondents approved of how Obama is handling his job, and 60 percent approved of his handling of the economy.

That survey and others released this week did show an increased partisan split in opinions of Obama, with rising numbers of GOP voters unhappy with his performance and opposed to the economic stimulus bill that nearly every congressional Republican voted against. Despite that divide, Obama is far more popular in the public's eye than the members of Congress he will be addressing tonight, as Capitol Hill Democrats earned a 50 percent approval rating in the Post poll and Hill Republicans stood at 38 percent.

The official GOP response to Obama's address was delivered tonight by Louisiana Gov. Bobby Jindal, widely viewed as a rising star in the party and a potential candidate for president in 2012. Jindal and a handful of his fellow conservative governors have drawn attention in recent days by saying they would refuse to accept some of the state aid contained in the stimulus package.

In his response, Jindal expressed his party's willingness to work with Obama but will denounce the stimulus measure as "irresponsible," according to excerpts released by the Republican National Committee.

"All of us want our economy to recover and our nation to prosper," Jindal said. "So where we agree, Republicans must be the president's strongest partners. And where we disagree, Republicans have a responsibility to be candid and offer better ideas for a path forward."

Jindal said "Washington must lead" in solving the nation's problems. "But the way to lead is not to raise taxes and put more money and power in hands of Washington politicians. The way to lead is by empowering you -- the American people. Because we believe that Americans can do anything."

Jindal - the son of Indian immigrants -- also sought to link his unusual background to that of Obama. "Like the president's father, my parents came to this country from a distant land," he said.

In addition to members of Congress, Cabinet officials, members of the diplomatic corps and Supreme Court justices, Obama spoke tonight before several other notable invitees.

Along with several regular citizens with symbolically resonant backgrounds, First Lady Michelle Obama's guests included Vermont Gov. Jim Douglas, a prominent Republican supporter of the stimulus bill; Ohio Gov. Ted Strickland (D); Earl Devaney, who has been named to lead oversight of the stimulus measure; and Lilly Ledbetter, whose pay discrimination lawsuit inspired the pay equity bill that was named after her and signed into law by Obama in January.

Speaker Nancy Pelosi's (D-Calif.) guests included key labor leaders as well as Chesley Sullenberger and his fellow crew members from US Airways flight 1549, which landed dramatically on the Hudson River last month with no loss of life.

U.S. Attorney General Eric Holder was not present for tonight's speech, following a tradition in which one member of the Cabinet does not attend and goes to a secure location in case a disaster occurs in the Capitol.

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