Obama: 'Help is on the way' for economy

Obama's promise to be careful with federal spending was placed in a larger context.

"As soon as the recovery is well under way, we need to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation," he said.

The picture took on troubling new dimensions a few hours before he spoke when the Commerce Department reported economic activity declined at a rate of 0.5 percent in the three months ending in September.

Further underscoring weakness, Americans' disposable income fell at an annual rate of 9.2 percent in the same period, the largest drop in records that date to 1947.

And The Washington Post reported Wednesday that the number of Americans using government-subsidized food stamps to buy groceries was expected to pass 30 million this month, a new record.

The federal budget deficit was a record $455 billion for the fiscal year that ended Sept. 30 and is certain to be higher in the current fiscal year — possibly reaching $1 trillion — as the costs of a financial bailout and an economic stimulus package are piled on top of smaller-than-expected tax receipts.

In an interview for ABC television to air Wednesday, Obama suggested that bank executives forgo their bonuses this year to show they are taking responsibility amid difficult economic times.

According to excerpts of the interview released by ABC, Obama said bank executives should make sacrifices because so many other people are struggling as the U.S. economy slips further. Some financial firms, including Goldman Sachs, the Swiss bank UBS and the British bank Barclays, have said they are not handing out annual bonuses to top executives, and Obama encouraged more to follow.

"I think that if you are already worth tens of millions of dollars, and you are having to lay off workers," Obama said, "the least you can do is say, 'I'm willing to make some sacrifice as well, because I recognize that there are people who are a lot less well off, who are going through some pretty tough times.'"

Obama also said the heads of the three auto companies who came to Washington asking for a bailout are a "little tone deaf" to what's going on in the country. It was the second time this week he has had harsh words for Ford Motor Co., Chrysler LLC and General Motors Corp. The struggling companies are pressing Congress for $25 billion in government loans.

During a news conference Monday, Obama said the Big Three may deserve some assistance, but taxpayers cannot be expected to blindly support an auto industry "that has been resistant to change."

Many economists think that aid to state and local governments should be tops on the agenda for any new stimulus spending, as they have less borrowing authority than the federal government and must slash budgets as the slowdown causes tax revenues to fall.

Obama and Vice President-elect Joe Biden plan to meet with nearly all the U.S. governors in Philadelphia next Tuesday to discuss how the economic crisis is crimping states and their budgets.

Alaska Gov. Sarah Palin, the former Republican vice presidential candidate, planned to attend the gathering, her office said.

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