WASHINGTON — Two months into his term, President Barack Obama went before the American people on Tuesday evening to say that he's enacted the broad plans needed to lift the country out of an economic crisis and urged the adoption of his $3.55 trillion budget as another critical step toward recovery.
"We've put in place a comprehensive strategy designed to attack this crisis on all fronts," he said at White House prime-time news conference, the second of his presidency.
"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."
He cautioned, however, that more work remains to be done. He pressed for new powers to regulate financial institutions such as insurance giant American International Group, and for a budget blueprint that would dramatically expand the size, reach and cost of the federal government.
He urged Americans and the world to be patient, saying it would take time to restore the economy, not to mention addressing other intractable problems such as violence in the Middle East. "I'm a big believer in persistence," he said.
The economy dominated the discussion, and even as he suggested reasons for optimism, a shift of tone from him after weeks of dire warnings, Obama strived to tie hopes of recovery to his proposed budget for the fiscal year starting Oct. 1.
"This budget is inseparable from this recovery because it is what lays the foundation for a secure and lasting prosperity," he said, all but warning that Congress's rejection of his budget would imperil the economy.
Obama recognized that he won't get all he wants even from a Democratic Congress and suggested a willingness to bargain on proposals to cut middle-class taxes and a plan to curb the emissions that cause global warming.
"We never expected when we printed out our budget that they would simply Xerox it," he said.
He said that he'd insist on broad principles, including an expansion of health care, spending on education and energy, and a reduction in the deficit.
"The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this 10 or 20 years from now," he said.
However, he didn't include in his must-do list his own middle-class tax cut or the plan to "cap and trade" greenhouse-gas emissions. He said he did get the tax cut into the temporary plan to stimulate the economy, so "we know that's going to be in place for at least the next two years." On the global-warming proposal, he said vaguely that "we've got to move toward a new energy future."
His budget blueprint, which lawmakers will start taking up Wednesday morning, faces increasing skepticism.
New forecasts from the nonpartisan Congressional Budget Office show already skyrocketing annual deficits climbing even higher than Obama had predicted just weeks ago, reaching $1.8 trillion, or 13.1 percent of the entire economy in the current fiscal year; and $1.4 trillion, or 9.6 percent of gross domestic product next year.
Mindful of the complaints that his budgets foretell red ink as far as the eye can see, Obama insisted that he's being fiscally responsible. "We have made the tough choices necessary to cut our deficit in half by the end of my first term even under the most pessimistic estimates," he said.
While his proposed expansion of the federal government would add trillions of dollars in debt, Obama said that he'd lay the foundation for a stronger recovery and more sustainable growth in the future.
"The best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led us to a narrow prosperity and massive debt," he said.
"It's with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest."
Yet the CBO projected that Obama's budget would double the national debt as a share of GDP over 10 years.
"When the president says 'save and invest,' he must really mean 'borrow and spend' more, since in his first budget the president manages to amass more debt than the previous 43 presidents combined," said Joe Pounder, a spokesman for Rep. Eric Cantor, R-Va.
And budget committees in Congress signaled on Tuesday they'd try to pare back some of Obama's proposed spending increases. "There will be change, there's no question," said Sen. Dianne Feinstein, D-Calif.
On other issues, Obama:
_ Defended the fact that it took him a few days to condemn bonuses for executives at AIG. "I like to know what I'm talking about before I speak," he said.
_ Explained his decision earlier in the day to send more guards — but no military — to help guard the U.S.-Mexico border.
"We are sending millions of dollars in additional equipment . . . hundreds of additional personnel that can help control the border," he said. "We are going to continue to monitor the situation. And if the steps that we've taken do not get the job done, then we will do more."
_ Rejected China's proposal for a new world currency to replace the dollar as the dominant currency.
_ Said he wrestled with his decision to allow federal financing of medical research using human embryos but that he was satisfied that he ordered ethical guidelines for it. "I don't take decisions like this lightly," he said. "This was the right thing to do, and the ethical thing to do."
_ Said that race hasn't been a major factor in his presidency. "The last 64 days has been dominated by me trying to figure out how we're going to fix the economy, and that affects black, brown and white," he said.
MORE FROM MCCLATCHY
Geithner's last shot: If this doesn't work, is nationalization next?
Geithner seeks expanded power to take over financial firms