In an address to the joint session of Congress late Tuesday, President Barack Obama said his combined stimulus, bank and housing plans, together with the energy, health care and education reforms he will propose in his 2010 budget, will increase employment, stimulate lending and get the U.S. economy out of recession.
He pledged a new level of accountability for banks that receive federal funds under the banking plan and promised CEOs and bank executives will no longer be able to engage in lavish spending where taxpayer dollars are concerned. Obama acknowledged in his address that "this plan will require significant resources from the federal government -- and yes, probably more than we've already set aside" in the $700 billion Troubled Asset Relief Program.
"And to ensure that a crisis of this magnitude never happens again, I ask Congress to move quickly on legislation that will finally reform our outdated regulatory system," Obama said. "It is time to put in place tough, new common-sense rules of the road so that our financial market rewards drive and innovation, and punishes short-cuts and abuse." He also urged Congress to "take charge of our future" and consider the budget he will release that addresses the "inherited" trillion-dollar deficit, financial crisis and costly recession.
And while he acknowledged the economy's problems did not begin overnight with the housing market collapse, Obama pointed out that the repercussions of the housing bubble and loose lending standards that came out of it are far-reaching. "Too many bad loans from the housing crisis have made their way onto the books of too many banks," he said. "With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other. When there is no lending...[o]ur economy suffers even more, and credit dries up even further."
To counter the effects of the crisis, Obama rallied the passage of the sweeping $787 billion financial stimulus package and a foreclosure prevention plan that combines homeowner incentives with refinancing strategies to save the qualifying family nearly $2,000 yearly on mortgage payments, according to Obama's remarks Tuesday. But he continues to "clean up the credit crisis" and get Americans working and get the economy back on its feet again, starting with a new budget that will propose health care, education and energy reforms -- as well as increased troops in Afghanistan -- while cutting unnessential government programs. "...I pledged to cut the deficit in half by the end of my first term in office," Obama said. "My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs.... We have already identified two trillion dollars in savings over the next decade."
Obama urged Congressional Democrats and Republicans to "sacrifice some worthy priorities" and come together on deciding the national budget. "We will rebuild, we will recover, and the United States of America will emerge stronger than before," he said.
Read his speech.
Diana Golobay at email@example.com