Live Blogging Obama's Press Conference
President Obama mounted a staunch defense of his policies tonight during the second full-scale press conference of his administration, parrying criticism of his budget proposal and reminding Americans that "there are no quick fixes, and there are no silver bullets" to fix the nation's economic problems.
Fielding 13 questions and a handful of follow-ups during a session that lasted just under an hour, Obama ranged far afield, focusing heavily on the economy but also answering questions on race, stem cell research, China, Israel, Mexico and the military budget. Like the economic crisis, Obama suggested, none of these problems have simple solutions.
"This is a big ocean liner, it's not a speedboat," he said, and so not easy to turn around quickly. Of the budget, Obama said: "If this were easy, then we would have already had it done."
Forceful at several moments, the president reserved his strongest answer for what turned out to be the sharpest question of the night - a query from CNN's Ed Henry suggesting that New York attorney general Andrew Cuomo was getting "all the action" on the American International Group bonus scandal. Henry asked the president why he hadn't gone public with his "outrage" over the bonuses earlier?
"It took a couple of days because I like to know what I'm talking about before I speak," Obama said.
Overall, Obama said his legislative program was designed to "make sure we do not return to an economic cycle of boom and bust." Twice, Obama referred to the "fleeting" or "narrow prosperity" of recent years and said his administration would pursue a different course.
But the president also faced several questions about the budget deficit, and about how his $3.6 trillion spending blueprint would increase the debt substantially over the next several years. Obama called his budget "inseparable from this recovery," and argued that the latest Congressional Budget Office projections were too pessimistic about economic growth and thus overstated how much debt would stem from his budget plan.
As for his critics from the GOP, "Some of those Republicans have a short memory. I inherited a $1.3 trillion debt" from the Bush administration, Obama said.
Though he defended the overall thrust of his budget plan, Obama would not reveal how committed he was to two key controversial planks in his proposal - a middle-class tax cut and an energy "cap-and-trade program" to reduce pollution. Obama declined to say whether he would accept a budget that did not include one or both of those programs, instead emphasizing that he wanted to hear Congress's own ideas on how to reduce pollution and pay for health-care reform.
Obama called on a variety of questioners during his session, including reporters from Univision, Ebony and Stars and Stripes. He did not call on representatives of many major newspapers - including the Washington Post, New York Times, USA Today or the Wall Street Journal - but did take a question from the Washington Times, about stem cell research.
-- Ben Pershing
Taking a question from the Washington Times on his executive order regarding stem cell research, Obama had a chance to address what a host of critics said was a failing of his remarks on the day of the order -- that they suggested Obama had insufficiently weighed the ethical questions raised by the research. Pressed by the questioner, Obama conceded that "there's always an ethical and moral element" involved in decisions about stem cell research, and he said he hoped that one day science would make it possible to cure diseases using technologies that have "100 percent consensus" from the public. But he stuck to the bottom line of his remarks on the day of his order, that science should be leading the way.
He also resisted pointing out an inaccurate phrasing in the question, which suggested that research on adult stem cells has so far proven more fruitful than that with embryonic stem cells. This is not the case. There have been some breakthroughs with adult skin cells, but the vast majority of scientists agree that embryonic stem cells hold far more promise. If they haven't produced more breakthroughs, that is partly because the biggest funding source in the world, the NIH, has been prohibited from funding most research involving embryonic stem cells -- until now.
President Obama had a message to the new right-leaning Israeli government: "The status quo is unsustainable." Binyamin Netanyahu, the incoming Israeli prime minister, has been deeply skeptical of the idea of creating a Palestinian state, but Obama indicated that the administration would press him to rethink that position. "We are going to be serious from day one in trying to move the parties," he said.
In response to a question by Politico's Mike Allen, Obama gave a vigorous defense of his plan to lower the charitable deduction and mortgage interest deduction for wealthy taxpayers, from the 36 or 39.5 percent savings they would get under his proposed marginal tax rates to 28 percent, closer to the savings that lower-income taxpayers get from the deductions. The change in the charitable deduction, which alone is estimated could provide $180 billion over 10 years, has come under fire from charities and universities that worry it will reduce giving, and from key Democrats such as Charlie Rangel and Max Baucus, who have hinted the proposal will not survive.
But Obama rebutted such criticisms in somewhat tart terms. The rate would simply be going back to where it had been under President Reagan, and wealthy people would give to charities even if they were getting a slightly smaller tax savings, he said. "If it's really a charitable contribution, I'm assuming [the tax savings] shouldn't be the determining factor of whether you're giving to the homeless shelter down the street." The change in the deduction rate, he added, "is not going to cripple" wealthy taxpayers. As for charities, what would help them the most is a stronger economy -- which he said his budget proposal would help produce.
Ann Compton of ABC News Radio, who admitted to being surprised that Obama called on her (perhaps because he had already called on Jake Tapper, also of ABC), asked the president a question about race. She wondered whether the subject of race was raised often in the White House as he handled his daily duties and whether it affected how he was judged. Obama responded: "I think that the last 64 days has been dominated by me trying to figure out how we're going to fix the economy, and that affects black, brown and white."
He said he contemplated the "searing" history of racial division in the U.S. after his election and that "lasted about a day" before he got to the business of trying to save the economy, and added that he was confident that "right now the American people are judging me exactly the way I should be judged" -- based on how well he was doing his job, not on his race.
Jake Tapper's question to Obama about the budget was moot in one sense, since the president does not actually have to sign the congressional budget resolution. Notable, though, was the way the president talked about the budget elements that Tapper focused on -- by leaving out the connection between them.
Obama explained that the middle-class tax cut is already paid for over the next two years by the stimulus package, and said that in the years beyond that, "We have identified a specific way to pay for it. If Congress has a better way to pay for it we're happy to listen." But he left out what that way is: the White House plans to pay for the "Making Work Pay" credit by using most of the money that would be raised from carbon-emitting industries under a cap and trade program.
From 2012 to 2019, Obama's budget envisions $526 billion of the $646 billion it expects to raise from cap and trade going toward the tax cuts.
That linkage has come under criticism on both sides of the aisle, from those who argue that cap and trade should be debated on the merits, and not justified because it happens to be the budgetary source for middle class tax cuts. Who knows -- perhaps those critics kept Obama from making the explicit link between the two big parts of his budget when he had the chance to do so tonight.
Obama also seemed to be cognizant of one of the other main criticisms of his cap and trade plan, that it would devastate the industrial Midwest and South, areas already hurt by the recession. He said that the plan "has to take into account regional differences" -- a statement that may reassure some midwestern Democratic congressmen, but cause anxiety among environmentalists hoping for a tough carbon regime.
CNN's Ed Henry opened the door for President Obama to get off his best zinger of the night so far.
Henry asked Obama why New York Attorney General Andrew Cuomo seems to be getting more results than the White House on the AIG bonus controversy -- by issuing subpoenas and strong-arming company executives to give back their bonuses or risk being publicly identified.
Obama's answer evidently did not satisfy Henry, who followed up by asking why it took the White House two days to comment on the AIG bonuses, while Cuomo charged out of the gate.
"Because I like to know what I'm talking about before I speak," Obama shot back.
Obama was reminded that he has said he did not run for president to pass on problems to the next generation -- and then proposed a budget that will increase the national debt by trillions over the next 10 years.
"I expect some of the Republican critics have a short memory," Obama began. "As I recall, I inherited" -- there's the I-word -- "a $1.4 trillion deficit" from the Bush administration.
Obama reiterated his claim that his budget will halve the deficit in the next five years, but the dispute comes in the "out years," or the years after that.
The dispute, Obama correctly said, is over the forecast of expected U.S. gross domestic product growth over those years.
The Congressional Budget Office has predicted growth of 2.2 percent per year. The White House has predicted a rate of 2.6 percent per year, which Obama said is "consistent with blue-chip forecasters out there."
According to the Bureau of Economic Analysis, U.S. GDP for 2007 grew at a rate of only 2 percent, down from 2.8 percent in 2006.
In the fourth quarter of 2008, GDP shrank at a rate of 3.8 percent, the biggest drop since 1982. And for the full year 2008, U.S. GDP grew at a rate of only 1.3 percent.
The Energy Department predicted U.S. GDP to drop by 1.4 percent this year, but the Economist predicted the U.S. GDP will contract by 3.1 percent this year.
In his question about the national debt, Chip Reid of CBS News referenced the criticisms of Obama's budget by Republicans. Indeed, House Minority Leader John Boehner (R-Ohio) said today: "I just think that this may be the most irresponsible piece of legislation I've seen in my legislative career. It's an irresponsible plan that only makes the crisis we're in worse."
Boehner also displayed a chart that illustrated the Congressional Budget Office's debt projections over the next several years under Obama's budget. "This is all of the debt through 2008 that's been accumulated in our country by 43 Presidents in 220 years in our history, and the President's budget will double that over the next six years," Boehner said.
In response, Obama was sharp. "Some of those Republicans have a short memory," Obama said, reminding that he had inherited a deficit of more than a trillion dollars from a Republican administration.
-- Ben Pershing
Obama pushed back against the suggestion that moderate Democrats could undermine the goals of his $3.6 trillion budget proposal by excluding his $800 tax cut for most middle-class families or his proposal to tax carbon emissions, as some on Capitol Hill have indicated they might.
Obama said that while specific points in the budget may be changed, his core goals of moving fowrad on health care reform, initiating a new energy policy and investing in education will be maintained. "I am confident that the budget will have those principles in place," he said.
The tax cuts, he pointed out, are already in place for two years as a result of the economic stimulus plan. "Our point in the budget is, Let's get started. We can't wait."
ABC News's Jake Tapper asked about the conditions under which Obama would sign the budget resolution; this is a silly question. The president does not sign the budget resolution. It is just a blueprint and it does not require the president's signature.
In the first question, President Obama was asked why the public should sign on to the broad new sweeping regulatory powers that Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner asked for on Capitol Hill today, given the government bailout's balky first few months.
"It is precisely because of this lack of authority that this situation has gotten worse," Obama said, maintaining that the government needs powers to regulate non-bank financial institutions such as AIG in the way that the FDIC regulates banks.
Obama -- and Geithner and Bernanke -- are asking for something called "macroprudential regulation," a concept in which governments are given the power to try to identify and deflate bubbles before they happen. For instance, if the government determines that asset prices are going up and lots of credit is being handed out -- such as in the housing bubble -- it would require banks to raise capital to fatten their balance sheet if the bubble bursts.
The concept has been tried with some success in South American countries but runs counter to much of America's free-market past. The U.S. may push the idea in the upcoming G-20 summit in London, which kicks off April 2.
Obama addressed the AIG bonuses, saying "I'm as angry as anybody" about the bonuses, which sparked uproar across America and on Capitol Hill over the past several days.
Obama said the economy needs to move from one of "borrow and spend to save and invest," an inventive and possibly memorable takeaway line from the speech and one that might be useful going forward.
He asserted that more loans have been securitized in the past week than in the past four months. The securitization, or secondary credit market -- when loans are chopped up and sold off -- has ground to a halt since the crisis escalated last fall.
Notably in his opening statement, Obama did not say his administration "inherited" the financial crisis from the Bush administration, a phrase that he and his proxies, including top financial adviser Lawrence Summers, have been repeating.
Instead, Obama said the crisis "took many years and many failures" to create, which does not directly blame Bush.
-- Frank Ahrens
President Obama had a line in his opening statement that seemed aimed squarely at the charge, popular in some conservative circles, that he is a "socialist." While saying that Wall Street needed to curb some of its "reckless behavior," Obama also said it was crucial "not to demonize every investor or entrepreneur who looks to make a profit." That instinct, he said, was what had fueled our past prosperity and would help get the economy moving again.
-- Ben Pershing
7:20 p.m. President Obama is set to hold the second full-dress news conference of his young administration tonight, facing the press as he and his economic team seek to battle the recession on several key policy fronts.
Obama will meet reporters in the East Room of the White House just hours after Treasury Secretary Timothy F. Geithner asked Congress to grant him new regulatory authority over non-bank financial institutions like American International Group. On Monday, Geithner unveiled the details of the administration's plan to form a public-private partnership to buy "troubled" assets from banks. And tomorrow, congressional panels will begin considering Obama's $3.6 trillion budget blueprint.
With so many irons in the fire, Obama is expected to focus heavily on the economy tonight. His message: The future is bright, but serious reforms are needed to prevent similar economic meltdowns in the future.
"[W]e've put in place a comprehensive strategy designed to attack this crisis on all fronts," Obama will say, according to excerpts of his opening statement released by the White House. "It's a strategy to create jobs, to help responsible homeowners, to re-start lending, and to grow our economy over the long-term. And we are beginning to see signs of progress."
Obama also will seek to link his budget proposal to a broader economic recovery. The blueprint, Obama will say, will help avert "another crisis like this ten or twenty years from now" by making key investments in renewable energy, education and health care reform. "And in this budget, we have made the tough choices necessary to cut our deficit in half by the end of my first term - even under the most pessimistic estimates," Obama will say.
While the economy is front and center, the administration is also confronting a variety of foreign challenges that could be the subject of discussion tonight. The White House unveiled a plan today to send more money and manpower to the U.S.-Mexican border in an effort to help stem the growing drug-related violence in Northern Mexico. The administration is also expected to focus more on Afghanistan strategy later this week.
Tonight's press conference is only the latest in a series of public appearances by Obama designed to sell his policy plans to the public. The president appeared on "The Tonight Show" last week and taped a lengthy interview for last Sunday's edition of "60 Minutes." The White House scheduled tonight's event for prime time on the East Coast, ensuring the largest possible viewership.
Republicans have already made their response to Obama's message clear. In a prebuttal to the president's press conference, House Minority Leader John Boehner (R-Ohio) said this afternoon that his party would continue to offer alternative solutions to the nation's economic problems that would not break the bank. Boehner called Obama's budget proposal "the most irresponsible legislation" he's seen in his congressional career and said that the White House's plans would drive the national debt to unsustainable levels.
-- Ben Pershing
March 24, 2009; 9:30 PM ET
Categories: 44 The Obama Presidency , Economy
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