Obama sees 'signs of progress' on economic crisis

Wednesday 25 March 2009 10:42

President Barack Obama said yesterday he was seeing signs of progress in his drive to lead the United States out of economic crisis as he sought to reassure recession-weary Americans he was on the right track.

"We're moving in the right direction," Obama said at his second prime-time White House news conference since taking office on 20 January.

Knocked off stride by public anger over hefty corporate bonuses and facing scepticism about his massive budget plan, Obama moved to regain his political footing and refocus attention on his broader economic agenda.

He made his case to the American people the same day he pressed for coordinated action among the world's major economies, and just a day after unveiling a trillion-dollar plan to soak up toxic bank assets at the root of the global financial meltdown.

Obama took the podium after US stocks slid while investors paused to reassess the government's latest effort to clean up bank balance sheets. Initial euphoria over the plan had driven stocks sharply higher on Monday.

Though the economy was in the spotlight, Obama's news conference also gave him a chance to lay some groundwork a week before he makes his debut on the world stage with his first major presidential trip overseas.

Brushing aside suggestions the G20 summit of major economies in London on 2 April would find him at odds with European partners, Obama said he expected leaders to share common goals of boosting growth and updating antiquated financial regulations while avoiding trade protectionism.

Obama, who has vowed to repair America's image overseas after eight years under predecessor George W. Bush, said there were indications his policy changes were "restoring confidence" internationally in US global leadership

He also made clear he was serious about his recent overtures of a fresh start with longtime US foe Iran and said the status quo of the Israeli-Palestinian conflict, in which he has promised strong US engagement, was "unsustainable."

Focusing on the economy, Obama said, "We'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 restart lending, and to grow our economy over the long-term. And we are beginning to see signs of progress."

The administration has recently cited glimmers of improvement in the devastated housing market, but most key economic indicators remain under extreme stress.

Obama's high approval ratings have been tested amid a public backlash over payment of $165m in executive bonuses by American International Group (AIG) after the insurance giant received $180bn in taxpayer bailout funds.

Obama was forced to repeatedly denounce the AIG bonuses while trying to temper public outrage and fend off calls for Treasury Secretary Timothy Geithner's resignation for his handling of the affair.

Obama kept a serious demeanor during the back-and-forth with reporters but became testy when pressed on the AIG scandal.

Asked why he delayed his own condemnation of the AIG payouts, the president - who has cultivated a "No-drama Obama" image" - said tersely, "It took us a couple of days because I like to know what I'm talking about before I speak."

The AIG furor distracted from Obama's effort to convince Americans that his $787bn economic stimulus programme will jolt the economy out of recession and his record $3.55 trillion budget for fiscal 2010 will be money well spent.

Trying to change the subject back to his economic rescue efforts, Obama defended his budget blueprint, which opposition Republicans and even some fellow Democrats have criticised for being too costly.

Obama said his budget, which will be taken up by congressional committees this week, would pave the way for broad economic growth "by moving from an era of borrow and spend to one where we save and invest."

The Congressional Budget Office projects under Obama's budget plan the deficit for fiscal 2009 will be just over $1.8 trillion and for fiscal 2010 will be almost $1.4 trillion.

Mindful of the challenges he faces, Obama tempered his economic outlook. "There are no quick fixes and there are no silver bullets," he said.

He insisted that despite US economic troubles, the dollar was "extraordinarily strong" due to confidence in America's economic prospects and said there was no need for a single global currency - a suggestion recently put forth by China and Russia.

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