Obama Warns Economy Will 'Get Worse'
President-Elect Also Pushes Administration for Urgent Action on Housing Front
Monday, December 8, 2008; Page A04
President-elect Barack Obama warned yesterday that "things are going to get worse before they get better" with the economy, and he pressed the Bush administration to act more urgently to help homeowners struggling with mortgage payments.
"We have not seen the kind of aggressive steps in the housing market to stem foreclosures that I would like to see," Obama said at a news conference in Chicago, where he announced his choice to lead the Department of Veterans Affairs. "My team has had some conversations with the administration about that. If it is not done during the transition, it will be done by me."
And he said in a taped interview broadcast yesterday that it is more important to stem the tide of foreclosures than to worry about whether undeserving homeowners would take advantage of a recovery program.
"If my neighbor's house is on fire, even if they were smoking in the bedroom or leaving the stove on, right now my main incentive is to put out that fire so that it doesn't spread to my house," Obama said on NBC's "Meet the Press."
Obama is considering a moratorium on home foreclosures, and he has urged the administration to figure out a way for banks and mortgage holders to renegotiate the terms of their existing deals, to bring payments down.
Obama has been careful not to overstep his authority before his swearing-in Jan. 20, but his comments, made two days after the government announced that more than half a million jobs were lost last month, suggested that he is willing to play a somewhat larger role in managing the economy in the interim.
In the news conference, two of the three questions Obama addressed dealt with economic matters.
He said he supports a rescue package for Detroit's automakers, adding that any auto industry leader who "doesn't understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances . . . should go." Still, he stopped short of echoing a call by Sen. Christopher J. Dodd (D-Conn.) for General Motors chief executive G. Richard Wagoner Jr. to resign.
Stimulating the economy was also a prime topic on NBC, where he was questioned about his intention, announced Saturday, to implement the largest public works program in decades. The mammoth program of infrastructure projects, such as bridge and road repairs, is intended to create 2.5 million jobs by 2011.
Obama did not specify how much the program will cost; outside experts have said it could run at about $500 billion. The president-elect did, however, acknowledge that the costs will be substantial, and he directly addressed the mounting federal budget deficit, saying that now is not the time to worry about it.
"We are inheriting an enormous budget deficit, you know -- by some estimates, over a trillion dollars. That's before we do anything," Obama said. "And so we understand that we've got to provide a blood infusion into the patient right now, to make sure that the patient is stabilized, and that means that we can't worry short-term about the deficit. We've got to make sure that the economic stimulus plan is large enough to get the economy moving."
Obama continued to portray the economic crisis as an opportunity to rebuild the country, structurally and culturally, and he said the situation today is not as grave as that facing Franklin D. Roosevelt before he took office in 1933, in part because of "social safety nets" created by Roosevelt's administration.