US president-elect Barack Obama said on Thursday the deepening US recession could stretch years into the future if Congress failed to act quickly on his call to pump hundreds of billions of federal dollars into the US economy.
In the speech at George Mason University in Virginia, near Washington, Obama cast blame on “an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington.”
However, failing to right those wrongs could have grave implications for all Americans, Obama said. He warned the country could face double-digit unemployment and US$1 trillion in lost economic activity if the government failed to act at once.
“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,” Obama said. “A bad situation could become dramatically worse.”
The address marked the fourth day running that Obama has urged fast action on huge spending in response to the worst US economic slide since the 1930s Great Depression. It was his first appearance directly aimed at taxpayers and the highest-profile pitch for the giant spending plan.
He 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 US$775 billion over two years in tax cuts and spending intended to jolt the economy and create new jobs.
Leading lawmakers set an informal goal of the middle of next month for enacting tax cuts and government spending that could cost as much as US$1 trillion.
A call for a US$3,000 tax break for job creation drew particular criticism in a private meeting of the Senate Finance Committee, and numerous lawmakers said Obama had not ticketed enough of his tax proposal for energy projects. The second-guessing game from the left and the right: While some Democrats said the incoming administration’s proposed tax cuts were too small, Republicans warned against excessive new spending.
Obama, while refusing to weigh in on foreign policy, has increasingly assumed a presidential air as he challenges Congress to move rapidly. Twelve days remain until his inauguration.
Presidents-elect typically stick to naming administration appointments and otherwise staying in the background during the transition period between the November election and Inauguration Day.
Obama has clearly made the calculation that a nation anxious about its economic outlook and eager to bid farewell to the current president, George W. Bush, needs to hear from him differently and more frequently.
Indeed, the economic news is grim.
Consumers have drawn into their shells and companies are failing as the recession deepens under collapse of the housing market, the nearly frozen global credit situation and trillions of dollars that vanished on the stock market. The recession, which started in December 2007, is already the longest in a quarter-century.
A new report on Thursday showed that the number of people continuing to claim jobless benefits jumped unexpectedly last week by 101,000 to 4.61 million, the highest level since November 1982. The high level of ongoing claims indicates that laid off workers are having a harder time finding new jobs.