Obama: Tough choices ahead

President outlines efforts taken to fix the economy and warns that more work has to be done to address troubled banks and automakers.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Jennifer Liberto, CNNMoney.com senior writer

Obama called on Congress to work with him 'to govern in extraordinary times.'
Bailout tracker
Follow the money: Bailout tracker
The government is engaged in a far-reaching - and expensive - effort to rescue the economy. Here's how you can keep tabs on the bailouts. More
What will you do with your income tax refund?
  • Spend it
  • Save it
  • Not getting a refund

WASHINGTON (CNNMoney.com) -- President Obama on Tuesday outlined the administration's efforts to restart the economy and warned that tough times and decisions lie ahead, according to prepared remarks of a speech he'll present in Washington.

Obama pointed to more job losses and foreclosures as well as "difficult and unpopular choices" when it comes to restructuring the auto industry and insurance giant American International Group (AIG, Fortune 500). The government has already sunk $182 billion into propping up AIG.

The Obama administration is under pressure to address the financial crisis on many different fronts. While job losses and foreclosures continue to mount, the credit markets remain frozen.

There's only $135 billion left in the Treasury Department's coffers for bailout measures. The administration is completing stress tests of the nation's 19 largest banks burdened with toxic assets to size up which will need more bailout dollars to survive.

In the meantime, the administration is trying to prepare the nation for the possibility that two of the largest domestic auto makers, General Motors (GM, Fortune 500) and Chrysler LLC, are likely headed for major restructuring's and possible mass layoffs.

Obama discussed all these developments, offering a fierce defense of pricey government actions to prop up tottering banks and clean their books of toxic assets.

"Of course, there are some who argue that the government should stand back and simply let these banks fail - especially since in many cases it was their bad decisions that helped create the crisis in the first place," he said. "The truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth."

Drawing on the biblical parable of two men who built their houses - one on sand and one on rock - Obama said the country need to rebuild the economy on a "new foundation."

That foundation includes many proposals that the Obama administration has unveiled but has yet to detail and will need congressional approval. Among them: stronger regulations of Wall Street and the possibility of more funding to bail out the financial sector and get the economy moving.

Obama also said he wants lawmakers to tackle health care and environmental initiatives, but experts say Congress has a full plate already and may not tackle such legislation until later this year.

Obama said he expects to have a health care bill arrive on his desk before the year is up. He was less definitive on hopes for bills that improve education standards and cap emissions.

"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," Obama said. "It's more than most Congresses and most presidents have to deal with in a lifetime. But we have been called to govern in extraordinary times." To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.