JIM LEHRER: President Obama addresses Congress and the nation tonight. He planned to focus heavily on the economy, as the head of the Federal Reserve assessed the prospects for recovery.
NewsHour correspondent Kwame Holman has our lead story report.
KWAME HOLMAN: The president’s address tonight to a joint session of Congress is not officially a State of the Union, but it will be his best chance yet to reassure the country.
White House press secretary Robert Gibbs offered a preview on the morning TV talk shows.
ROBERT GIBBS, White House press secretary: I think what you’ll hear from the president tonight is a sober assessment about where we are and the challenges that we face. But listen to the end, and I think you’ll hear the president tell Americans that this country has met many big challenges before and he believes that we’re on the right path to meeting those challenges and that better days are ahead for this country.
KWAME HOLMAN: Later, the Federal Reserve chairman, Ben Bernanke, said no one is sure just how far off those “better days” are. He told a Senate hearing it depends on efforts to rescue the financial system and to stimulate the broader economy.
BEN BERNANKE, Federal Reserve chairman: If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability — and only if that is the case, in my view — there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.
Consumer confidence hits new low
KWAME HOLMAN: There was no sign the public sees a recovery soon. The business research group the Conference Board reported consumer confidence hit a new low this month.
And the Standard and Poor's index of home prices fell nearly 20 percent at the end of last year, the most in more than 20 years.
On the banking front, Sheila Bair, head of the Federal Deposit Insurance Corporation, tried again to calm fears of government takeovers of big banks. She told CBS, "There's ambiguity in the word 'nationalization'."
And at the Bernanke hearing, Republican Sen. Bob Corker of Tennessee pressed the Fed chairman.
SEN. BOB CORKER, R-Tenn.: It seems to me that this has been creating this sort of dead man walking, sort of zombie-like banking scenario. And while I have been using these words out and around, it seems to me that what you have explained is a creeping nationalism of our banks.
BEN BERNANKE: Senator, there's two sides to this. One side is providing the capital, which they need to have in order to provide credit to the economy, which is essential, but we're not just handing them this capital and saying, "Go do your thing."
We also have on the other side the supervisory oversight, the TARP oversight, to make sure that they are not just sitting around, but they are taking the steps necessary to clean themselves up, get themselves straightened out, so that they will be profitable in the future.
SEN. BOB CORKER: I mean, that, to me -- and I certainly haven't been around that long here -- but that to me is nationalization. I mean, that -- I'd like for you to give me a term to use, as I leave here, as to what we would call that.
BEN BERNANKE: Well, a public-private partnership. It's not nationalization, because the banks would not be wholly owned or probably not even majority-owned by the government. The government will be a shareholder along with the private shareholders.
Anticipating Obama's message
KWAME HOLMAN: The markets have been roiled by reports that Citigroup is about to sell the government a larger ownership stake. And Bank of America's CEO, Ken Lewis, went so far as announcing to employees that his company is not considering an increase in government investment.
But Wall Street took heart from the Bernanke remarks today. The Dow Jones industrial average gained 236 points to close near 7,351. The Nasdaq rose 54 points to end at 1,441, halting a steep sell-off, at least for the moment.
With so much about the economy hanging in the balance, lawmakers on both sides anticipated what the president will say tonight. Republicans expected a new appeal for bipartisan help.
REP. ERIC CANTOR, R-Va.: But there are some principles by which we're going to operate in proffering our ideas to the president and, frankly, to our congressional colleagues on the other side of the aisle. One is, Washington shouldn't be spending money that we don't have. And, two, we shouldn't be raising taxes on businesses and families that can't afford to pay them.
KWAME HOLMAN: Congressional Democrats made clear they think Republicans caused the economic chaos and have little to offer now.
REP. PETER DEFAZIO, D-Ore.: Then we had the bank collapse, and the recession, growing into a depression. And what was the answer of George Bush? Tax cuts. And what's the answer of the Republicans today? Tax cuts.
For them to say they're for fiscal responsibility and honest budgeting after those eight years is laughable. The Obama administration is going to give it straight to the American people tonight. They've made a hash out of it, and we're going to try and fix it, but it's going to take some time.
KWAME HOLMAN: The president's address is set for 9 p.m. Eastern time, followed by the Republican response from Gov. Bobby Jindal of Louisiana. Both will be carried on most PBS stations.