News & Events

In Georgetown Speech, Obama Offers Cautious Optimism (MC)

By Michael D. Shear and William Branigin Washington Post Staff Writers
Tuesday, April 14, 2009; 12:36 PM

President Obama today laid out a vision for a new era of U.S. economic prosperity and called on the nation to "get serious" about reforming entitlement programs such as Medicare, Medicaid and Social Security — reform that he said starts with overhauling the American health care system. entitlement reform," Obama said in a speech at Georgetown University in Washington. "That’s one of the reasons why I firmly believe we need to get health care reform done this year." This will bring down costs "across the system, including in Medicare and Medicaid," he said.

Linking health care to broader economic problems, Obama said, "The key to dealing with our deficit and debt is to get a handle on out-of-control health care costs — not to stand idly by as the economy goes into free fall."

But efforts to tackle this thorny problem and address other basic weaknesses in the U.S. economy are hampered by "a fundamental weakness in our political system," Obama said. He pointed to what he said was a proclivity in Washington to postpone hard decisions.

"There’s been a tendency to score political points instead of rolling up sleeves to solve real problems," Obama said. "There is also an impatience that characterizes this town — an attention span that has only grown shorter with the 24-hour news cycle and insists on instant gratification in the form of immediate results or higher poll numbers. When a crisis hits, there’s all too often a lurch from shock to trance, with everyone responding to the tempest of the moment . . . instead of confronting the major challenges that will shape our future in a sustained and focused way."

Obama warned, "This can’t be one of those times. The challenges are too great. The stakes are too high. I know how difficult it is for members of Congress in both parties to grapple with some of the big decisions we face right now. . . . But we have been called to govern in extraordinary times, and that requires an extraordinary sense of responsibility."

In his speech, Obama generally offered an optimistic assessment of efforts to revive the economy but warned that tough times are still ahead as the nation rebuilds its financial system.

Aides to the president billed the speech as a major effort to speak broadly about the state of the recovery, but it offered no new policies.

Speaking at the nation’s oldest Catholic and Jesuit university, Obama referred repeatedly to a parable from the Sermon on the Mount to describe the challenge that confronts Americans as they recover from the recession. He compared the recovery to the story of two men, one of whom builds his house on sand, the other on rock.

"We cannot rebuild this economy on the same pile of sand," Obama said. "We must build our house upon a rock. We must lay a new foundation for growth and prosperity — a foundation that will move us from an era of borrow and spend to one where we save and invest, where we consume less at home and send more exports abroad."

In the speech, Obama continued what has become a series of moderately hopeful comments about the success of a variety of recovery efforts, saying, "Taken together, these actions are starting to generate signs of economic progress."

But he also sounded more than a note of caution.

"It does not mean that hard times are over," he said. This year "will continue to be a difficult year for America’s economy. The severity of this recession will cause more job loss, more foreclosures and more pain before it ends. The market will continue to rise and fall. Credit is still not flowing nearly as easily as it should."

With "much more work to be done," the president pledged "an unrelenting, unyielding, day-by-day effort from this administration to fight for economic recovery on all fronts."

Obama’s appearance at Georgetown came as new indicators paint a mixed picture of the nation’s economy. Retail sales fell by 1.1 percent in March, an unexpectedly sharp decline that was the steepest in three months and worse than analysts had predicted. But at the same time, the economy received new evidence that it has little to fear from inflation, as wholesale prices fell sharply last month.

In a separate speech being delivered this afternoon at Morehouse College in Atlanta, Federal Reserve Chairman Ben. S. Bernanke reports "tentative signs that the sharp decline in economic activity may be slowing," according to the text of his remarks.

Bernanke adds: "A leveling out of economic activity is the first step toward recovery. To be sure, we will not have a sustainable recovery without a stabilization of our financial system and credit markets."

Obama emphasized "the progress we’ve made" in righting the economy after nearly three months in office but also cautioned Americans "about the pitfalls that may lie ahead."

He presented a vision of "a future where prosperity is fueled not by excessive debt, reckless speculation and fleeting profit, but is instead built by skilled, productive workers — by sound investments that will spread opportunity at home and allow this nation to lead the world in the technologies, innovations and discoveries that will shape the 21st century."

Obama said a solid foundation for the U.S. economy must be built on five pillars: new rules for Wall Street, new investments in education, renewable energy and health care and new federal budget savings to reduce debt.

Reiterating the optimism he has expressed in recent days, Obama said: "There is no doubt that times are still tough. By no means are we out of the woods just yet. But from where we stand, for the very first time, we are beginning to see glimmers of hope."

He envisioned "way off in the distance" a transformed nation, one "teeming with new industry and commerce, humming with new energy and discoveries . . . a place where anyone from anywhere with a good idea or the will to work" can live the American dream.