Crisis and plan to fix it 'unprecedented'

President-elect turns up the heat on his plan for massive spending and tax cuts to try to revive stagnant economy.

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By David Goldman, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- President-elect Barack Obama took his campaign for an economic rescue plan to the public Thursday, calling on Congress to pass a bill in the next few weeks, warning that a failure to do so would have devastating long-term consequences for the nation.

Obama spoke before an expected crowd of 500 elected officials and students at George Mason University in Virginia.

"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs," Obama said in a speech on the economy. "I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible. If nothing is done, this recession could linger for years."

Obama, who takes office on Jan. 20, addressed critics who oppose such a massive spending plan by the federal government.

"It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe," Obama said.

Obama did not put a price tag on his proposal, which he calls the American Recovery and Reinvestment Plan, but said the cost will be "considerable," due to to the depth of the recession.

"I know the scale of this plan is unprecedented, but so is the severity of our situation," he said. "As the economy recovers, the deficit [will] start to come down. We cannot have a solid recovery if our people and our businesses don't have confidence that we're getting our fiscal house in order."

Obama has publicly said that he plans to propose massive spending and tax cuts to revive the economy, which has been mired in recession for more than a year.

Earlier this week, Obama met with congressional leaders from both parties to push for his plan.

Obama will propose roughly $300 billion in tax cuts for individuals and businesses, including a $1,000 tax cut to 95% of working families. He has suggested the overall size of the package will be about $775 billion, 40% of which would be in tax cuts.

In addition to tax cuts, Obama said Thursday he will propose to create lasting jobs for the future, which would be "the foundation for long-term economic growth."

He proposed doubling production of alternative energy in the next three years by modernizing 75% of federal buildings, investing in solar panels and wind turbines and by making cars more fuel-efficient.

Obama also proposed modernizing the health care system by computerizing all of the nations' medical records in the next five years. He proposed investing in science and research technology "that will lead to new medical breakthroughs."

Finally, the president-elect said he wants the government to rebuild the nation's infrastructure. He offered up programs to rebuild crumbling roads, bridges and schools, as well as expand broadband lines across America and modernize the nation's electrical grid.

"It's not just another public works program," Obama said. "We'll invest in priorities like energy and education, health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century."

Obama cautioned that the crisis will take time - perhaps years - to solve, but "is not beyond our ability to solve."

-- CNN Political Editor Mark Preston contributed to this report. To top of page

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