Obama Defends Economic Strategy
President Barack Obama on Tuesday drew a comprehensive outline of his economic vision for the country, defending short-term spending as necessary to rescue the economy and his longer-term outlays as the key to keep it afloat.
Much of what Obama said he has said before. But he described his plans in a way he has not previously done, offering a detailed and integrated rationale for his approach.
“I want every American to know that each action we take and each policy we pursue is driven by a larger vision of America’s future,— Obama said in an address at Georgetown University in Washington.
Obama seemed particularly sensitive to criticism that he is spending too much even as the national debt spirals upward. He repeatedly rejected such attacks.
“Economists on both the left and right agree that the last thing a government should do in the middle of a recession is to cut back on spending,— he said. “The government has to step in and temporarily boost spending in order to stimulate demand.—
Obama asserted that spending down the line on health care, alternative energy and education will be needed to keep the economy on track. He argued that a health care overhaul, even with its price tag, is what’s necessary to reform Medicare and bring down the program’s ballooning costs.
“Make no mistake: health care reform is entitlement reform,— he said. The president reiterated that he expects health care reform to be completed by the end of the year.
The president also firmly placed blame for the deficit on the previous president, George W. Bush.
“The problem with our deficit and debt is not new,— Obama said. “It has been building dramatically over the past eight years, largely because of big tax cuts combined with increased spending on two wars and the increased costs of government health care programs.—
But Obama did not blame today’s problems exclusively on the Republicans and Bush. At times he appeared to leave room for Democrats in his criticisms
“As the bubble grew, there was almost no accountability or oversight from anyone in Washington,— he said.
Not surprisingly, Republicans were not immediately convinced that Obama has put the country on the right course for recovery.
“Our economy will improve — but it will be because of the ingenuity and hard work of American workers and small businesses, not because of the Washington Democrats’ misguided policies that rely on recklessly spending taxpayer dollars,— House Minority Leader John Boehner (R-Ohio) said in a statement.
“This is money we don’t have, yet the president’s trillion-dollar stimulus’ was loaded with wasteful spending that has nothing to do with job creation, his $410 billion omnibus’ spending bill was chock full of 9,000 unscrutinized earmarks, and his $3.5 trillion budget paves the way for a bigger and costlier federal government that will not create new jobs, help rebuild Americans’ savings, and get our economy moving again,— Boehner said.
Obama warned that the government would use tough love when it comes to companies needing its help. He suggested more difficult changes are ahead for domestic automakers and the insurance giant American International Group. “We are not finished yet on that front,— he said.
Bankers whose institutions are now undergoing “stress tests— can expect repercussions for past failures, Obama vowed.
“We will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets,— Obama said.