Obama Unveils Ambitious Economic Agenda

In Midst Of Crisis, President-Elect Urges Quick Action; Focuses On Job Creation, Clean Energy

(CBS/AP)  President-elect Barack Obama warned of dire and lasting consequences if Congress doesn't pump unprecedented dollars into the national economy, making an urgent pitch Thursday for his mammoth spending proposal in his first speech since his election.

"In short, a bad situation could become dramatically worse" if Washington doesn't go far enough to address the spreading crisis, Mr. Obama said as fresh economic reports showed an outlook growing increasingly grim.

Since his November election, he has deferred to President George W. Bush on foreign policy matters such as the Middle East. But, with the urgency of the economic crisis, Mr. Obama has waded deeply into domestic issues as he works to generate support for his plan to create jobs, jolt the economy and make long-term investments in other areas.

In the speech at George Mason University outside of Washington, Mr. Obama cast blame on "an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington."

But he added, "The very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness."

Mr. Obama laid out goals of doubling the production of alternative energy over three years, updating most federal buildings to improve energy efficiency, making medical records electronic, expanding broadband networks and updating schools and universities.

Still, his remarks shed little new light on the details of his plan that could cost as much as $775 billion over two years in tax cuts and spending intended to jolt the economy and create new jobs.

And given the breadth of the problem implementing a recovery plan might be too daunting a task.

"It's just not that easy to figure out how to stimulate an economy in this condition," writes CBS News chief political consultant Marc Ambinder. "In a normal recession, small tax cuts might boost savings, which, if the economy were growing, would be fine. But Obama needs Americans to spend, spend, spend, and not to save."

About $300 billion of Mr. Obama's package would be for tax cuts or refunds for individuals and businesses. But those tax cuts ran into opposition Thursday from senators in his own party who said they wouldn't do much to stimulate the economy or create jobs.

Senators from both parties agreed that Congress should do something to stimulate the economy. But Democratic senators emerging from a private meeting of the Senate Finance Committee criticized business and individual tax cuts in Mr. Obama's stimulus plan.

They were especially critical of a proposed $3,000 tax credit for companies that hire or retrain workers.

"If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," said Sen. Kent Conrad, D-N.D., a member of the committee.

"That to me is just misdirected," Conrad said.

The speech marked Mr. Obama's highest-profile effort yet on an issue certain to define and dominate his early presidency.

"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," he said.

Governors of six states and mayors of 14 cities - a bipartisan audience that came from as far away as Minnesota and Utah to be among the few hundred in attendance - listened to the speech that lasted less than a half hour. Included were Mayor Michael Bloomberg of New York City.

Mr. Obama asked Congress to work day, night and on weekends if necessary to pass a revival plan within the next few weeks so that it can be ready for his signature shortly after he takes office on Jan. 20.

"There are signs in Washington that this stimulus package is getting bogged down a bit," said CBS News correspondent Chip Reid. "He wants the American people to understand how bad things are. It is potentially catastrophic and he wants to light a fire under Congress and get them to do this and do it quickly."

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Click here for analysis by chief political consultant Marc Ambinder
Click here for more analysis from the CBS News team.
Click here for a full transcript of President-elect Barack Obama's speech

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The speech came amid a grim economic backdrop. The Labor Department reported Thursday that total unemployment claims jumped to around 4.6 million last week, even though the number of new claims dropped unexpectedly.

For all of 2008, employers probably slashed payrolls by at least 2.4 million. And some economists predict a jump in the jobless rate from 6.7 to 7 percent in December, which would be the highest in more than 15 years, reports CBS News correspondent Priya David. The Labor Department will release the latest unemployment figures Friday.

Of the 3.2 million jobs that the Obama administration says will be saved or created, a million of those jobs will come from a $25 billion investment in infrastructure - building and renovating roads, bridges and schools while making a long-term investment in renewable energy and "green" initiatives, reports CBS News correspondent Kelly Wallace.

On Wednesday, news of an unparalleled federal budget of $1.2 trillion for the 2009 budget year was revealed, according to a Capitol Hill aide briefed on new Congressional Budget Office figures.

Mr. Obama acknowledged the new stimulus spending will "certainly add to the budget deficit." He also acknowledged some sympathy with those who "might be skeptical of this plan" because so much federal money has already been spent or committed in an attempt - largely unsuccessful so far - to get credit, the lifeblood of the American economy, flowing freely once again.

Such statements are coded to appeal to budget hawks in both parties, whom Mr. Obama wants to win over so that approval of a package draws wide, bipartisan support in the Democratic-led Congress.

Mr. Obama also pledged to keep his stimulus plan free from pork barrel spending, telling Congress that "this must be a time when leaders in both parties put the urgent needs of our nation above our own narrow interests."

[scotch41-2009]

I think Obama had better get off of the wacky tobaccy!!

[scotch41-2009]

I''m just a little confused here....Obama proposes hundreds of billions in spending, yet proposes a tax cut at the same time....DUH!! Are we getting a tax cut so that the taxes we save can go back into the government spending (got to get those hundreds of billions from some place)????

[swin5]

On the subject of I-70 in central and western Colorado:
Two years ago when I drove this road, I thought up this idea. In seeing that railroad on the other side of the valley, a railroad that seemed to belong there - I thought that all our vehicles could have been loaded on a train and we could have leisurely made the trip to Denver. A bit slower, perhaps, but much more pleasant, more environmentally friendly, and all those nice little towns we would pass through would not be destroyed by this ugly, dirty, and loud concrete eyesore ripping right through them.

And for those of you who never traveled this road - I-70 travels through the mountains of Colorado through deep gorges. To build the road, the hillside had to be cut back in many places, the river banks in many places no longer exist, and in some places the eastbound and westbound lanes are stacked on top of each other or are terraced into the hill because they wouldn''t fit in the valley any other way. To me, this is not mankind living in harmony with his environment, but attempting to alter and thus destroy it.
Please don''t think me too critical if you''re from Colorado - here in Pittsburgh they are actually building a tunnel under one of our three rivers for our streetcars - only thing is there are already 2 bridges crossing that river that are only a few hundred feet away. And you want to talk about productive government spending???

[swin5]

To kirkussent1
The interstate highway system? Let''s see, the interstates:
1. Destroyed whole city neighborhoods and left others virtually unlivable.
2. Led to urban sprawl.
3. Increased air pollution and production of greenhouse gasses.
4. Increased noise levels for anybody a mile or more away.
5. Destroyed wildlife habitats.
6. Destroyed wetlands and millions of acres of green lands.
7. Destroyed the railroads.
8. Destroyed public transit, commuter trains, and a number of light rail systems.
9. Burned off a large amount of our energy reserves- just as the interstates were being built, domestic oil production peaked and began to decline.
10. Put an end to walk-around people-friendly neighborhoods.
11. Made commuters out of almost everybody when years ago most people walked or took the streetcar to store, school, or work.
12. Are an aesthetic nightmare - would you rather walk down Elfreth''s Alley in Philadelphia or walk along the Schuylkill expressway?
13. So many books and travel guides for exploring Old Route 66 or the National Road (US Route 40) - never saw a guide for exploring I-70. Speaking Of I-70, ever drive it through the mountains of Colorado? - what an eyesore.

Getting carried away here - I do believe that road building is a necessary function of government but the interstate system went way too far - we should have kept freight on the railroads, upgraded our U.S. highway system, and kept the interstates out of urban areas (which, by the way, was the original plan).

[impeach_o]

creating plans and jobs is easy..MAKING PEOPLE GET OFF THIER ARSE AND WORK AND NOT EXPECT THE GOVT TO DO EERYTHING FOR THEM IS .......................

THE QUESTION HERE

[kirkussent1]

To swin5

The interstate highway system.
It never would have been built otherwise.

[swin5]

To ofbyfor3

Can you give me an example of where government spending has generated wealth and productivity? And make sure that your example shows conclusively that the money would not have been better spent by the private sector.

[swin5]

To ofbyfor3

George Westinghouse founded a corporation but George Westinghouse was not a corporation. His inventions were the result of his own brilliant mind and capital that he raised himself. Granted in later years his corporation may not have followed this example, but I contend that this didn''t happen until after the 1930''s and the beginning of the era of big government.

Again, government produces nothing, it merely drains resources from the productive sector of society. Have you stopped to think that Obama''s trillion dollar borrowing is going to be at the expense of corporate America being able to borrow what it needs for research, development, and expansion. Go to Vanguard''s web site and compare the historic returns for funds invested in government and corporate bonds - you will see that corporate America has to pay a higher interest to borrow money because it has to compete with government bonds, which by the way entice you to throw money their way by exempting the returns from taxes. Wouldn''t it be better to exempt returns from corporate bonds from taxes?

[swin5]

To ofbyfor3

You are correct in your analysis of ''trickle down'' economics - it never trickles down past the greed of the wealthy class. However, you state that you should ''put'' more money in the hands of the middle class - this is not quite right - you don''t put money in their hands, you create conditions under which they can produce the wealth and then you guarantee that they get to keep their fair share of that wealth. Although the steel industry is gone here in Pittsburgh where I live, one can still travel through Homestead, Braddock, and city neighborhoods along the 3 rivers and see that the steel laborers never shared in the wealth they helped produce for Carnegie and Frick.

And incidentally, many people believe that both government spending (New Deal) and World War II ended the last depression. Wrong! What ended the depression was a law that FDR really didn''t support - the Wagner Act. This law finally gave the worker the right (which he constitutionally already had but that was ignored) to organize unions and bargain collectively. Thus when WWII ended, the worker demanded and got a fairer piece of the wealth that he produced and the nation embarked on an era of tremendous growth. Until Reagan, Bush, and Clinton destroyed the middle class, declared war on the unions, and shipped all the wealth producing jobs overseas. In other words, trickle up economics succeeded in the 1950''s, trickle down has brought us to the edge of a great depression.

[swin5]

To The Masses 100

Wrong on both counts - it was Chico.

Actually I''d take any of the Marx Brothers (or the 3 Stooges for that matter) over Obama, Pelosi, Reid, McCain, Palin, Bush, Clinton (Bill or Hillary), Kennedy, Reagan, or any of those flub-a-dubs.

[otiswestfall]

Hey TXGrouch2008:
I agree about tariffs. I just finished re-reading Pat Buchanan''s book, The Great Betrayal. He knew what we needed to do with tariffs 10 years ago, but nobody listened.

[ofbyfor3]

I made no reference to corporate entities - how the corporations founded by these individuals behaved after the era of big government began in the 1930''''s was not my point. I was referring to the era of the largest period of growth in the nation''''s wealth and industrial power - the period after the Civil War.

Shall I go on? Government is not the answer, it is the problem.

Posted by swin5 at 09:24 AM : Jan 09, 2009

Since when is Westinghouse NOT a corporate entity? And since the developers you mentioned eventually created businesses that received government funding for R&D, I stand by my original point; Government CAN make a positive difference. Proven by history.

[ofbyfor3]

I can only assume because you NObama worshippers are all satisfied the government actually created this mess to begin with????

What a display of arrogance born of ignorance y''''all offer.

Posted by I_H_Libturds at 09:18 AM : Jan 09, 2009

Deregulation on the part of the government had a HUGE part to play in this mess.

What is YOUR suggestion to improve things? So far, I don''t see that you HAVE anything to suggest, just criticisms of other people''s proposals.

[ofbyfor3]

That was our take on the whole thing. When discussing it with family they said the government will never do that because the system is designed to keep us in debt.

Posted by Donyetta at 08:14 AM : Jan 09, 2009

Your suggestion is very valid and is in keeping with the Keynesian theory of economics.

That theory says that money in the hands of working people who need to spend will put money into the economy faster than money in the hands of the wealthy who can either hang onto it (in offshore nontaxable accounts) or spend it overseas.

It is the antithesis of ''trickle-up'' economics which suggests that the only way to improve the economy is to put money back into the hands of the wealthy and the corporations in the HOPE OF the dream that they will put that money back into job creation.

The problem with ''trickle-down'' is that there is NO GUARANTEE that they will do this. They can pay their CEO''s millions or invest it in jobs in OTHER countries. It does not guarantee that American workers will see more or better-paying jobs.

The Keynesian theory suggests that putting more money into the American middle-class consumer will lead to increased spending and therefore increased profits for American businesses which will THEN increase the availability of jobs in the US.





Posted by Donyetta at 08:14 AM : Jan 09, 2009

[jondoe12]

The bailout should''''ve never taken place. It just added to our debt!



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Posted by GOPHwy71 I do agree with that.

[gophwy71]

The bailout should''ve never taken place. It just added to our debt!

[jondoe12]

The goverment should have given all that bailout money to the people that would have saved people''s houses and kept people spending therefore keeping people employed a few hundred bucks isn''t going to stop what''s happening,america is going to fall flat on it''s face not that i wan''t it to but you would have to be blind to not see that coming.

[gophwy71]

You can''t spend your way out of debt. We have to PAY OFF THE DEBT, not build more.

Stupid liberal reasoning.

[gophwy71]

I can''t believe y''all elected this guy!!!

[swin5]

"A democracy will survive only as long as it takes the people time to realize they can vote themselves into the treasury." Karl Marx

Total debt approaches $12 trillion not counting social security entitlements - there is no trust fund - all that extra money was spent by the government and the debt was kept off-budget. $12 trillion is around $40,000 for every man, woman, and child in America. Family of 4?? - you owe $120,000.

Was Marx right?