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Obama Calls for ‘Bold and Swift’ Action on Economy

January 28, 2009 at 6:00 PM EDT
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President Barack Obama met Wednesday with business leaders and renewed his calls for Congress's quick action on passing a new economic stimulus plan.
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JIM LEHRER: President Obama faced his first major test in Congress today. House Democrats moved on a sweeping stimulus package of spending and tax cuts, as the president lobbied the private sector for support. Judy Woodruff reports on the day’s events.

JUDY WOODRUFF: As the stimulus debate resumed in the House, some of the nation’s best-known corporate executives left their boardrooms to meet in the president’s, the Roosevelt Room of the White House.

U.S. PRESIDENT BARACK OBAMA: I’m very grateful that all of these individuals have taken the time to come. These are some of the leading CEOs in the country. These are people who make things, who hire people. They are on the frontlines in seeing the enormous problems in our economy right now.

JUDY WOODRUFF: Later, in the East Room of the White House, one of those CEOs, David Cote of Honeywell, highlighted a sense of urgency about the huge recovery plan.

DAVID COTE, chairman and CEO, Honeywell: Mr. President, we appreciate your leadership, the vitality that you’re bringing to these tough times that are needed, and I have to say thank God you are not a timid man.

JUDY WOODRUFF: With a fresh announcement from Boeing that it is cutting another 5,500 jobs, Mr. Obama used the moment to press the House before its vote on the stimulus package, now calculated at $819 billion.

U.S. PRESIDENT BARACK OBAMA: The businesses that are shedding jobs to stay afloat, they can’t afford inaction or delay. The workers who are returning home to tell their husbands and wives and children that they no longer have a job, and all those who live in fear that their job will be next on the cutting blocks, they need help now.

They are looking to Washington for action, bold and swift. And that is why I hope to sign an American Recovery and Reinvestment Plan into law in the next few weeks.

I know that there are some who are skeptical of the size and scale of this recovery plan. And I understand that skepticism, given some of the things that have happened in this town in the past. And that’s why this recovery plan will include unprecedented measures that will allow the American people to hold my administration accountable.

House members disagree on tax cuts

JUDY WOODRUFF: As the president made that plea, just up Pennsylvania Avenue, House members debated the bill's size and scale, but not before Democrats agreed to strip out a few items, including one in Congress's front yard, $200 million to re-sod the National Mall.

And not before Republicans questioned how much the plan would actually boost the economy. Georgia's Jack Kingston cited recent examples of government outlays to question whether the current plan will have an impact.

REP. JACK KINGSTON, R-Ga.: ... $200 billion for Fannie Mae bailout, $85 billion for AIG bailout, $700 billion for the TARP, the Wall Street bailout. If this kind of spending worked, we would be in great shape in our economy right now, but we keep throwing more and more money on the problem.

JUDY WOODRUFF: California's David Dreier said the bill lacked the right tax provisions to do what's needed.

REP. DAVID DREIER, R-Calif.: We're all feeling the pain of this economic downturn. The question is, what action will we take? Are we going to put into place a bill that is 627 pages long -- $1.18 billion for every single page of that bill -- with spending that will go beyond the next 10 years as we seek to immediately jump-start our economy?

Or are we going to do what so many economists from both sides of the aisle have indicated we need to do: put into place strong, growth-oriented tax cuts that can provide the fast-acting jump-start that we all seek? That's the choice that we have here.

JUDY WOODRUFF: But Democratic Whip James Clyburn of South Carolina said tax cuts were not the silver bullet to the economic crisis.

REP. JAMES CLYBURN, D-S.C.: I have listened intently to the opponents of this legislation. And per their usual prescription, they tell us that only tax cuts can cure this recession.

But, Mr. Speaker, what good is a tax cut when you don't have a job? America works when Americans work.

Our package is balanced. It has middle-class tax cuts; it has business tax cuts; it has investments in our physical infrastructure. It is the right mix of spending and tax breaks to get America working again.

JUDY WOODRUFF: And the chair of the Appropriations Committee, David Obey, said the size of the bill equaled the severity of the problem.

REP. DAVID OBEY, chair, Appropriations Committee: The fact is that we need to compare the cost of this package with the cost of doing nothing. The cost of doing nothing would be catastrophic; the cost of this package is well worth the risk, considering the alternative.

New oversight rules for bailout

JUDY WOODRUFF: As the debate proceeded, the plan garnered little Republican support, despite the president's appeal across party lines. But President Obama invited a small group of House and Senate members from both sides of the aisle to the White House for drinks after the vote.

The Obama administration also proceeded on a second front. The new treasury secretary, Timothy Geithner, announced new oversight rules were in the offing on the $700 billion bailout of the financial industry.

TIMOTHY GEITHNER, Treasury secretary: We are putting together what we hope will be a comprehensive plan for helping repair the financial system and bring recovery as a critical component to the president's commitment to get growth going and bringing the economy back on track. And we're looking at a range of options in that context.

JUDY WOODRUFF: Along with more oversight of what banks do with rescue money they're given, the Treasury is also considering the creation of a so-called "bad bank" to take toxic assets off the books of financial institutions in order to encourage more lending.

And in one more move to shore up the flagging economy, the Federal Reserve vowed to keep a key interest rate at a record low.