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Obama: Economic Crisis Is As Dire As Any Since 1930s
Reuters
| 09 Feb 2009 | 12:38 PM ET

President Barack Obama says the nation cannot afford to "posture and bicker" while people are losing their jobs by the millions in a failing economy.

Obama went to Elkhart, Ind., to talk to voters in a state where the rate of unemployment has soared to over 15 percent of the workforce. He was introduced by a man who lost his job in the recreational vehicle industry.

The president, in a town hall meeting, said he wanted to come to the Midwest to assure people that he's working hard to turn the economy around.
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Obama said the nation is facing "an economic crisis as deep and as dire as any since the Great Depression."

Obama said that the economic stimulus bill being considered by Congress is the right size and scope and warned that the country's troubles will worsen if it is not passed promptly.

"It is the right size, it is the right scope. Broadly speaking it has the right priorities to create jobs that will jump-start our economy and transform it for the 21st century," Obama said of the more than $800 billion bill. "I can say with complete confidence that endless delay or paralysis in Washington in the face of this crisis will only bring deepening disaster," Obama said.

Obama also said that an independent, bipartisan board will oversee spending in the massive economic stimulus package to ensure that the money is not wasted.

"We're going to set up an independent board made up of Democrats and Republicans to review how the money is being spent, because we've got to make sure that it's not being wasted on somebody's special project that may not actually create help for people," Obama said.

Getting Momentum

The president, in office just three weeks, flew to Elkhart for a campaign-style town hall meeting with some 1,700 residents of a city whose recreational vehicle manufacturing industry has been hit hard by the recession.

The president was trying to regain momentum after a week in which a key cabinet nominee withdrew in a flap over unpaid taxes and his push for a stimulus plan hit unexpected snags in the Democratic-controlled Congress. And on Monday, at 8 pm EST, he is due to hold his first White House news conference in the East Room after returning from Elkhart. On Tuesday, he plans to visit Fort Myers, Fla., an area hit hard by home foreclosures.

But the White House added yet another stop this week: in Peoria, Ill., on Thursday. Gibbs said that Obama will visit a Caterpillar Inc. plant. The heavy equipment maker has announced 22,000 job cuts in recent weeks, including at its East Peoria facility.

The Indiana visit gave Obama a chance to make his case for the economic rescue package in a familiar setting.

The White House said the manufacturing city has seen its unemployment rate soar to 15.3 percent from 4.7 percent over the past year. Hundreds of workers have lost their jobs at RV makers such as Monaco Coach, Keystone RV and Pilgrim International.

The later prime-time news conference in the White House East Room would let him make his economic case to a national audience and allow him to try to clear the air after admitting he "screwed up" his handling of the nomination of Tom Daschle, a former prominent senator, to lead his healthcare reforms.

Focus on the stimulus package, which has been approved by the House of Representatives and is expected to clear the U.S. Senate on Tuesday, led the administration to postpone Treasury Secretary Timothy Geithner's much-awaited announcement of a bank rescue plan until Tuesday.

The House of Representatives has approved an $819 billion economic recovery plan, while the U.S. Senate is expected to pass an $827 billion measure, but fashioning a compromise could be difficult because the two versions differ on tax cuts and spending.

Stimulus Needed Now

"We've got to work through the differences, find the best bill we possibly can, and get it in place as quickly as possible," Lawrence Summers, a top Obama economic adviser, told "Fox News Sunday," noting some 600,000 jobs were lost last month.

"If there was ever a moment to transcend politics, this is that moment," said Summers, director of the White House National Economic Council.

A procedural vote on the Senate bill was set for 5:30 p.m. EST, and if the bill survived that vote it was likely to receive final approval on Tuesday.

"It's a good package and one that our country really needs," Republican Senator Susan Collins of Maine, a chief author of the compromise bill, said on Monday on NBC's "Today Show."

Concerned that accusations of wasteful spending were bogging down the stimulus bill in Congress, Obama has adopted a sharper tone toward his Republican critics, warning them "the time for talk is over" and charging that tax cuts alone are a "losing formula" to stimulate the economy.

Obama has repeatedly reminded Republicans they lost the November election and that Americans voted for his agenda of change.

Return To Elkhart

Obama returned to Concord High School, having campaigned there in August in his successful push to become the first Democratic presidential candidate to win Indiana since 1964.

The industrial city of about 50,000 just east of South Bend also has long been home to musical instrument makers. "We've done some diversification over the years, but not enough to offset what has happened in the RV industry," Elkhart County Commissioner Terry Rodino said last week.

Keystone RV Co. in Goshen informed 350 workers on Feb. 2 that they will be laid off in April. Jayco Inc. in Middlebury told more than 250 workers that they will be out of work in two weeks. Elkhart County Commissioner Mike Yoder estimated that the county's unemployment rate is now likely closer to 20 percent.
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URL: http://www.cnbc.com/id/29100482/