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President Points To Progress on Economic Efforts
He Says Budget Is Key to Recovery

By Michael D. Shear and Scott Wilson
Washington Post Staff Writers
Wednesday, March 25, 2009

President Obama sought to reassure Americans last night that his administration has made progress in reviving the economy and said his $3.6 trillion budget is "inseparable from this recovery."

After sprinting through his first months in office, Obama is now facing heightened criticism from Republicans, who have called his blueprint irresponsible, and from skeptical Democrats who have already set about trimming back his top budget priorities.

Obama came into office amid lofty expectations and the worst economic crisis in generations, and he succeeded in pushing through a $787 billion stimulus and launching expensive plans to revive the banking system.

Last night, against a backdrop of a broad national anxiety that the economy may still be failing, he attempted to recalibrate the high hopes to more closely fit the challenges he said lie ahead.

Although he spoke sharply once in response to Republican criticism, Obama struck a tone of common purpose throughout his second prime-time news conference, urging the country to be patient as he works on issues as divergent as the Israeli-Palestinian conflict and the malign impact of lobbying in Washington.

"We haven't immediately eliminated the influence of lobbyists in Washington," he said from the East Room of the White House. "We have not immediately eliminated wasteful pork projects. And we're not immediately going to get Middle East peace. We've been in office now a little over 60 days.

"What I am confident about is that we're moving in the right direction."

Throughout the evening, Obama returned repeatedly to his belief that patience and determination will win out, declaring that the "whole philosophy of persistence, by the way, is one that I'm going to be emphasizing again and again in the months and years to come as long as I'm in this office. I'm a big believer in persistence."

Asked about congressional efforts to chip away at his main facets of his agenda, Obama gave no indication that he would need to abandon core principles.

"We never expected, when we printed out our budget, that they would simply Xerox it and vote on it. We assume that it has to go through the legislative process. . . . I have confidence that we're going to be able to get a budget done that's reflective of what needs to happen in order to make sure that America grows."

During the 55-minute news conference, Obama faced no questions about the wars in Iraq and Afghanistan, Osama bin Laden, or terrorism. Instead, the president focused consistently on his administration's efforts to boost the economy, presenting his first budget proposal as the critical and most far-reaching step in that process.

In a statement earlier in the day, House Minority Leader John A. Boehner (R-Ohio) said Obama's budget "may be the most irresponsible piece of legislation I've seen in my legislative career. It's an irresponsible plan that only makes the crisis we're in worse. But when it's all said and done, I think it's time for a do-over."

Responding with his most partisan comment of the evening, Obama said his Republican critics should look to their own history with the federal budget, accusing them of having "a short memory" when it comes to deficits.

"As I recall, I'm inheriting a $1.3 trillion annual deficit from them," he said.

Obama's appearance came on the same day that lawmakers grilled Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke for hours about their knowledge of the AIG bonus payments and lectured the officials for not preventing them.

And shortly before the president took to the lectern, Democrats in Congress were preparing to make sharp cuts to the budget plan he was seeking to rally Americans to support.

Repeating that he, too, was angry about the bonuses, Obama tried to tamp down the populist anger that has consumed much of Washington in the past 10 days.

"The rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit," he said. ". . . When each of us looks beyond our own short-term interests to the wider set of obligations we have to each other -- that's when we succeed."

Obama's comments last night -- delivered in a calm and measured tone -- were a departure from his emotional declarations of outrage last week that helped speed anti-AIG legislation through the House. He called on the public to "look toward the future with a renewed sense of common purpose, a renewed determination."

Asked why he waited several days to publicly express his frustrations after finding out about the AIG bonuses, he coolly said: "It took us a couple of days because I like to know what I'm talking about before I speak."

The White House announced yesterday that the president will meet with the leaders of some of the nation's largest banks Friday. A White House official said Obama will "reiterate his belief that getting the economy back on track will require an understanding that each of us must look beyond our own short-term interests."

During the news conference, Obama defended his efforts, announced by Geithner earlier in the day, to seek broad new authority to oversee companies like AIG in the same way that the Federal Deposit Insurance Corp. can take control of struggling banks.

"It is precisely because of the lack of this authority that the AIG situation has gotten worse," he said.

The question-and-answer session also served to continue Obama's direct-to-the-public lobbying effort on behalf of his budget. He will take his case to Capitol Hill today when he meets with Democratic senators.

The news conference was the culmination of more than a week of aggressive public outreach for his policies. Last week, Obama traveled to California for two town hall meetings aimed at persuading Americans to support his plans. He also appeared on "The Tonight Show With Jay Leno."

"We've put in place a comprehensive strategy designed to attack this crisis on all fronts," Obama said last night. "It's a strategy to create jobs, to help responsible homeowners, to restart lending and to grow our economy over the long term. And we are beginning to see signs of progress."

Obama said that "almost every single person" who has examined the nation's long-term budget problem has concluded that the government must find a way to reduce health-care costs. He argued that his proposal will cut the deficit in half by the end of his first term.

"This is hard," he said later. "The reason it's hard is because we've accumulated a structural deficit that's going to take a long time. . . . The alternative is to stand pat."

Most of the questions focused on the economy. But Obama also waded briefly into foreign policy just days before his first trip to Europe as president.

Referring to the Israeli-Palestinian conflict, he said: "The status quo is unsustainable." Binyamin Netanyahu, the incoming Israeli prime minister, has been deeply skeptical of the idea of creating a Palestinian state, but Obama indicated that the administration will press him to rethink that position. "We are going to be serious from Day One in trying to move the parties," he said.

On a day that his secretary of homeland security announced tougher measures aimed at enhancing security along the border with Mexico, Obama pledged to monitor the increasing drug violence in that country that threatens to spill into the southwestern United States.

"If the steps that we have taken do not get the job done, then we will do more," he pledged. In addition to securing the border against incoming threats, he also promised to work hard to "make sure that illegal guns and cash aren't flowing back to these cartels."

Asked whether race had played a role in public policy discussions during his first months in office, he said the novelty and "justifiable pride" among Americans from his being the first black president had lasted only a day.

"Right now, the American people are judging me exactly the way I should be judged," he said, offering as examples his efforts to improve lending, increase jobs and get the economy working again.

Asked about stem cell research, Obama acknowledged the need for moral and ethical standards to guide scientific issues and said he is satisfied that his new rules allowing greater research are consistent with such standards.

But he said he would be willing to shift his views if scientists determine that adult stem cells can be as useful as those created from embryos.

"I have no investment in causing controversy," he said. "I am happy to avoid it if that's where the science leads us."

Presidents George W. Bush and Bill Clinton each had four prime-time news conferences from the East Room during their eight years in office, according to Martha Joynt Kumar, a professor of political science at Towson University. Obama has already held two in little more than two months in office.

Obama has been criticized for relying heavily on a teleprompter, even for short speeches and brief appearances. Last night, the teleprompter was moved to the back of the room, out of sight of the cameras.

Staff writers Michael A. Fletcher, Karen DeYoung and Glenn Kessler contributed to this report.

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