As President Barack Obama addressed a joint session of Congress on Tuesday, Feb. 24, he had two main jobs to accomplish on the economic front: First, he had to acknowledge the scope of the economic crisis facing the country while striking an optimistic tone. Then he needed to offer a broad-brush preview of the budget he plans to submit Thursday, even as he demonstrated a credible commitment to tackle a budget deficit groaning under the weight of hundreds of billions of dollars of economic-stimulus spending.
As expected, Obama offered little in the way of new economic or business policy, beyond a glimpse of the budget. He emphasized the urgency of health-care reform, which, together with energy policy and education reform, form the top tier of the Administration's initiatives. And he warned that restoring the financial system to health would be costlier than expected, suggesting he is likely to ask Congress for additional funds.
Throughout, he saw his main job as bucking up the American people without sounding too Pollyanna-ish. "We will rebuild, we will recover, and the United States of America will emerge stronger than ever," Obama said to the kind of rousing applause that typically peppers such joint-session and State of the Union speeches.A Break With the Past
Blaming the economic crisis on gutted regulations, irresponsible home buyers, unscrupulous lenders, and "critical debates and difficult decisions…put off for some other time on some other day," he said that the "day of reckoning has arrived." He argued that it is now a time to "act boldly and wisely, to not only revive this economy, but to build a new foundation for lasting prosperity."
In many ways, the content of the speech was unusual compared to the Presidential addresses of his predecessor. Foreign policy, including trade, got short shrift, cropping up mostly toward the end of the speech, when he promised a speedy and responsible end to the wars in Iraq and Afghanistan, and to expand global markets while resisting protectionism.
And he spent several minutes early in the speech on the credit crisis, calling the restoration of credit Job One for the Administration and taking pains to lay out how reviving the banking system will help Americans generally: Fostering loans to a new homeowner creates jobs for homebuilders, who can then afford to buy cars or open their own businesses; conversely, he said, tight credit means fewer home and car sales, "so businesses are forced to make layoffs. Our economy suffers even more, and credit dries up further."Failing to Act Could be Fatal
Acknowledging "how unpopular it is to be seen as helping banks right now, especially when everyone is suffering from their bad decisions," Obama argued that the Administration's plan to restore lending is "not about helping banks, it's about helping people." (Later, he lauded a Florida banker, Leonard Abess, for divvying up a $60 million bonus he received after selling his bank among 471 current and former employees.)
Not only will the plan "require significant resources," he said, but "probably more than we've already set aside." He argued, however, that failing to act would prove far worse.
The optimistic tone was in many ways a marked contrast from most of the five weeks of his Presidency, and during the transition before it, when Obama has pulled no punches about the grim economic news he and the country have had to absorb and often has given little more than a nod to the American public's resilience.Further Emphasis on Potential Expected
Indeed, he's taken some knocks from political opponents for being too gloomy; Louisiana Governor Bobby Jindal, who gave the GOP response to Obama, scolded the President on this front, saying: "Our troubles are real, to be sure. But don't let anyone tell you that we cannot recover or that America's best days are behind her."
The optimism battles go beyond politicking, said Jeffrey Kling, a Brookings Institution senior fellow in economic studies. From here on out, expect to hear a lot more from Obama about the country's potential, and the promise of a strong recovery. "Restoring consumer confidence is probably the single biggest thing the President can do to get the economy moving," Kling said. "I expect to see the corner being turned here," at least rhetorically.