WASHINGTON (AP) - President Barack Obama claimed early progress
Tuesday night in his aggressive campaign to lead the nation out of
economic chaos and declared that despite obstacles ahead, "we're
moving in the right direction."
At the second prime-time news conference of his presidency,
Obama also toned down his criticism of bonuses to executives at
bailed-out AIG, and shot back at Republican critics of his budget.
In office for 64 tumultuous days, Obama cast his budget - now
under review in Congress - as essential if the economy is to
recover. The tax and spending plan "is inseparable from this
recovery because it is what lays the foundation for a secure and
lasting prosperity," he said.
The president also defended the U.S. dollar in the wake of
China's suggestion for a universal currency, saying: "The dollar
is extraordinarily strong right now," and "I don't believe that
there is a need for a global currency."
The news conference, lasting 55 minutes, came at a pivotal,
early moment in Obama's young presidency. Democrats in Congress are
readying budget proposals that will largely determine how much of
his first-term agenda will be passed, Treasury Secretary Timothy
Geithner is churning out near-daily proposals to solve the nation's
economic crisis and the administration is struggling with public
and congressional outrage over bonuses paid to executives of
bailed-out AIG. Additionally, Obama departs next week for his first
European trip as commander in chief, with the global economy a
Flexible on some points, Obama was unyielding on others. Pressed
on why he seemed to delay before condemning the AIG bonuses, Obama
said, "It took us a couple of days because I like to know what I'm
talking about before I speak."
The news conference was dominated by questions about the
economy. Obama defended the steps his administration has taken to
counter the recession and an unprecedented credit crisis. He said
teachers and others have jobs today because of the economic
stimulus measure that Congress passed, and the nation is
"beginning to see signs of increased sales and stabilized housing
prices for the first time in a long time."
He said full-fledged recovery is months away, and he added, "It
will take patience."
At the same time, he said, "we're in a better place because of
the decisions that we made."
Obama put in a plug for the request Geithner made to Congress
earlier in the day for extraordinary authority to take over failing
companies like American International Group Inc., much as the
Federal Deposit Insurance Corp. now does for banks.
"It is precisely because of the lack of this authority" that
AIG's problems threatened to bring down the entire U.S. economy, he
said. Top Democrats in Congress reacted positively to the proposal,
although it is not clear when legislation might be considered.
Obama has been vocal in his unhappiness over the $165 million in
retention bonuses paid to executives at AIG, although his favorable
reference to business men and women seeking profits was a new
"Bankers and executives on Wall Street need to realize that
enriching themselves on the taxpayers' dime is inexcusable, that
the days of outsized rewards and reckless speculation that puts us
all at risk have to be over," he said.
"At the same time, the rest of us can't afford to demonize
every investor or entrepreneur who seeks to make a profit. That
drive is what has always fueled our prosperity, and it is what will
ultimately get these banks lending and our economy moving once
more," he said.
On other issues, Obama:
- Said the American people are assessing his ability as chief
executive based on his skills and work, not the color of his skin.
He said there was justifiable pride in January, when he was
inaugurated as the first black president.
- Strongly defended his proposal to raise taxes on the wealthy
by reducing the value of the deductions they may take for items
such as home mortgages or charitable donations. It's a "realistic
way for us to raise some revenue from people who benefited
enormously over the last several years. Its not going to cripple
them. They will still be well-to-do," he said.
- Called his decision to expand federal support of embryonic
stem cell research the "right thing to do and the ethical thing to
do." He said he wrestled with the ethics of the decision but is
hopeful that the science will lead to help for people with
- Said the recent elections in Israel would not make it easier
to create a stable environment with side-by-side Israeli and
The president opened the news conference with a prepared
statement read from a screen, turning the event's opening moments
into a brief speech delivered to a nationwide TV audience in
addition to the roomful of reporters.
He said his administration was taking steps to make sure banks
have money to lend "even if the economy gets worse."
Obama said he did not feel the government should call on
Americans to make sacrifices beyond those imposed by the recession
and credit crisis. "Folks are sacrificing left and right ...
across the board, people are making adjustments large and small,"
Obama was quick with a retort when asked about Republican
criticism of his budget, with its huge projected deficits.
"First of all," he said he inherited a deficit of over $1
trillion from his predecessor. And secondly, he said the
Republicans have yet to offer an alternative to his own tax and
Obama has emphasized a desire to cut projected deficits in half
by the end of his current term, although recent estimates make it
appear almost impossible barring an extraordinary series of events.
Given concern in Congress over the red ink, Senate Democrats are
drafting a separate budget plan that assumes Obama's proposed
middle class tax cut expires after two years - the sort of sleight
of hand that other administrations of both parties have used in the
While Congress' budget does not go to the White House for a
president's signature, the White House traditionally seeks to
influence its provisions. Obama restated his objectives Tuesday
night - health care overhaul, a new energy policy and more money
for education and deficit control.
Obama stepped to the microphone one day after his administration
unveiled a plan to melt the credit freeze by helping banks shed bad
loans. Under the proposal, the government will finance the purchase
by private investors of as much as $1 trillion of the $2 trillion
in bad assets still held by the nation's banks, in the hopes of
freeing banks to begin lending more freely and churn up economic
On Wednesday, Obama is heading to Capitol Hill to lobby Senate
Before Obama's speech, Senate GOP leader Mitch McConnell
emphasized Republican criticism of the president's proposed budget
as an over-spending, over-taxing disaster. A Congressional Budget
Office analysis released last Friday estimates Obama's budget would
generate deficits totaling $9.3 trillion over the next decade
"If these plans are carried out, we run the risk of looking
like a Third World country," said McConnell, R-Ky.
Obama's job approval rating is 63 percent, according to Gallup
polling. That number has been relatively stable recently, down from
the 68 percent when the president took office mostly on a loss of
support among Republicans.
(Copyright 2009 by The Associated Press. All Rights Reserved.)