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President Barack Obama said Tuesday night his attempts to lead the nation out of economic turmoil are beginning to yield results, and toned down his criticism of bonuses to executives at bailed-out AIG.
At the second prime-time news conference of his presidency, Obama also cast his budget -- now under review in Congress -- as essential if the economy is to recover. The tax and spending plan "is inseparable from this recovery because it is what lays the foundation for a secure and lasting prosperity," he said.
Briefly reviewing the steps his administration has taken to date, he said teachers and others have jobs today because of the economic stimulus measure that Congress passed, and the nation is "beginning to see signs of increased sales and stabilized housing prices for the first time in a long time."
At the same time, he said full-fledged recovery is months away, and he added, "It will take patience."
The news conference came at a pivotal, early moment in Obama's young presidency, with Democrats in Congress readying budget proposals that will largely determine how much of his first-term agenda will be passed, Treasury Secretary Timothy Geithner churning out near-daily proposals to solve the nation's economic crisis and the administration struggling with public and congressional outrage over bonuses paid to executives of bailed-out AIG. Additionally, Obama departs next week for his first European trip as commander in chief, with the global economy a major focus.
Speaking in the East Room of the White House, Obama put in a plug for the request Geithner made to Congress earlier in the day for extraordinary authority to take over failing companies like American International Group Inc., much as the Federal Deposit Insurance Corp. now does for banks.
"It is precisely because of the lack of this authority" that AIG's problems threatened to bring down the entire U.S. economy, he said. Top Democrats in Congress reacted positively to the proposal, although it is not clear when legislation might be considered.
Obama has been vocal in his unhappiness over the $165 million in retention bonuses paid to executives at AIG, although his favorable reference to business men and women seeking profits was a new twist.
"Bankers and executives on Wall Street need to realize that enriching themselves on the taxpayers' dime is inexcusable, that the days of outsized rewards and reckless speculation that puts us all at risk have to be over," he said.
"At the same time, the rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit. That drive is what has always fueled our prosperity, and it is what will ultimately get these banks lending and our economy moving once more," he said.
The president opened the news conference with a lengthy prepared statement read from a teleprompter.
He said his administration was taking steps to make sure banks have money to lend "even if the economy gets worse."
Obama said he did not feel the government should call on Americans to make sacrifices beyond those imposed by the recession and credit crisis. "Folks are sacrificing left and right ... across the board, people are making adjustments large and small," he said.
Obama was quick with a retort when asked about Republican criticism of his budget, with its huge projected deficits.
"First of all," he said he inherited a deficit of over $1 trillion from his predecessor. And secondly, he said the Republicans have yet to offer an alternative to his own tax and spending plan.
Obama has emphasized a desire to cut projected deficits in half by the end of his current term, although recent estimates make it appear almost impossible barring an extraordinary series of events.
Obama reassured Americans that U.S. veterans will be taken care of better than they have been in previous years because the budget is providing proper funding for the returning soldiers.
Excerpts from Obama's opening remarks show that he is using the event to push his budget proposal:
[W]e've put in place a comprehensive strategy designed to attack this crisis on all fronts. 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.
The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this ten or twenty years from now. We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of health care for families, businesses, and our government. 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.
At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led to a narrow prosperity and massive debt. It's with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest.
That's what clean energy jobs and businesses will do. That's what a highly-skilled workforce will do. That's what an efficient health care system that controls costs and entitlements like Medicare and Medicaid will do. That's why this budget is inseparable from this recovery - because it is what lays the foundation for a secure and lasting prosperity.
We will recover from this recession. But it will take time, it will take patience, and it will take an understanding that when we all work together; when each of us looks beyond our own short-term interests to the wider set of obligations we have to each other - that's when we succeed. That's when we prosper. And that's what is needed right now. So let us look toward the future with a renewed sense of common purpose, a renewed determination, and most importantly, a renewed confidence that a better day will come.
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Politico delved into reporters' "war game" preparation for the event.
CBS's Chip Reid jots the gist of his questions on a legal pad. CNN's Ed Henry writes them word for word on white paper torn from the notebook he's using, so there's no danger of cards dropping to the ground. Fox's Major Garrett has three word-for-word questions and three "concept questions" in reserve.
ABC's Jake Tapper comes with about a dozen questions, including ones he's gathered from colleagues, bosses, his blog and Twitter.
Like athletes limbering up for the big game, White House reporters have been going through elaborate preparatory rituals as they bone up for tonight's prime-time news conference with President Obama, the second formal "presser" of his presidency.