Obama to nation: ‘Day of reckoning has arrived’

Bluntly declaring that the “day of reckoning has arrived” after years of financial irresponsibility, President Barack Obama told Americans on Tuesday night that “we will rebuild, we will recover and the United States of America will emerge stronger than before.”

In the opening passage of his address to a joint session of Congress, Obama said “the impact of this recession is real, and it is everywhere,” the result of extravagant buying, gutted regulations and inadequate financial planning.

The president spared no one in his analysis of who was at fault: Too many everyday Americans bought homes they could not afford and did not think about their next mortgage payments. Too many banks handed out loans to people who could not pay. Politicians allowed the surplus to disappear with tax cuts for the rich. Regulations were gutted to help companies make a quick profit.

“Well, that day of reckoning has arrived, and the time to take charge of our future is here,” the president said.

Out of the rubble, Obama said, was an opportunity to remake the economy and build a foundation for lasting prosperity.

“The weight of this crisis will not determine the destiny of this nation,” he said. “The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.”

The trappings of a State of the Union
Obama, who is only five weeks into his term, did not cast the speech as a formal State of the Union address, although it had all the same trappings. Instead, he described it as a “frank talk” about his economic agenda, which he is to flesh out in his official budget blueprint to Congress on Thursday.

Obama praised lawmakers for passing a $787 billion version of his economic rescue plan, which he said would save or create 3.5 million jobs.

But more is needed, he said. After a line-by-line review of the budget, the president said he had identified $2 trillion in savings over the next 10 years, which he promised would cut the deficit in half by the end of his first term. He said he had appointed Vice President Joe Biden to lead a “tough, unprecedented oversight effort, because nobody messes with Joe.”

Obama also touched on foreign policy, but that was largely left for other speeches. This speech was devoted to filling in the details of the budget approach Obama has outlined in broader terms during his first few weeks in office.

Uncle Sam as neighborhood banker
The president indicated that the government would be getting into the consumer banking business, creating a federal lending fund to help provide auto loans, college loans and small business loans “to the consumers and entrepreneurs who keep this economy running.” He did not provide any further details.

Nor did he provide specifics of a promised housing plan that “will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages.” But he promised that under the plan, the average family would be able to save nearly $2,000 a year by refinancing their mortgage.

And he said he would use “the full force of the federal government” to ensure that banks would have enough money to lend “even in more difficult times.”

Again, he did not say how he planned to do that, but he vowed that unstable banks would be forced to make “the necessary adjustments” and that executives responsible for problems would be held accountable.

Obama said he understood that Wall Street may be more comforted by an approach that gives banks bailouts with no strings attached,” but he said such an approach would not solve the problems in the financial system.

“Our goal is to quicken the day when we re-start lending to the American people and American business and end this crisis once and for all,” he said.

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