Obama: Economy needs dramatic jolt

UPDATED:

Warning of a recession that could last for years, Barack Obama” href=”/themes/?Theme=Barack+Obama” >President-elect Barack Obama on Thursday demanded “dramatic action” from Congress to prevent double-digit unemployment and preserve America’s world leadership.

“Every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse,” Mr. Obama said at a speech at George Mason University.

He said 2009 begins “in the midst of a crisis unlike any we have seen in our lifetime,” but said with that crisis comes the chance to start over including breaking the cycle of politics in Washington.

“There are the years that come along once in a generation the kind that mark a clean break from a troubled past, and set a new course for our nation,” he said, sounding the theme that helped propel him to the presidency.

Mr. Obama is seeking support from Congress for a spending package that would cost taxpayers around $800 billion over several years, though economists have told him the tab should be as much as $1.3 trillion.

On Wednesday, the Congressional Budget Office projected the 2009 deficit would run to $1.2 trillion, even before including a dime from the new spending package.

While arguing for urgency, Mr. Obama gave few details about what his massive spending bill will entail. But he drew broad outlines: programs to install Internet access in rural areas, retrofit government buildings to make them energy-efficient, buy books and lab equipment for schools, computerize health care records and build roads, bridges and schools.

He also said he’ll ask Congress to include a $1,000-per-couple tax cut for families making less than $200,000.

For the first time since his election Mr. Obama took to the format he has mastered the set-piece speech. But he appeared a bit rusty, occasionally stumbling over words.

Top congressional Republicans Senate Minority Leader Mitch McConnell of Kentucky and House Minority Leader John A. Boehner of Ohio said they have reservations about the size of the stimulus plan and how it will be spent.

“Given the deficit number, it really ought not be a $1 trillion spending bill,” Mr. McConnell said at a Capitol Hill press conference with Mr. Boehner.

They said they were encouraged by Mr. Obama’s pledges to spend much of the stimulus on tax cuts, consider Republican proposals and make the expenditures transparent to the public. But they said the proof will be in the final bill, which has yet to be revealed.

Mr. Obama will say he understands skepticism about the government’s role, particularly since Congress and Mr. Bush already have spent hundreds of billions of dollars on rescuing the auto industry and financial sector, “but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy.”

He says his spending package will work because it will rely on “independent experts” to spend the money.

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