Persevere with me on economy, says Obama

Next stop Capitol Hill to head off confrontation on the federal budget

(GETTY IMAGES)

As President Barack Obama entered a critical phase in his budget negotiations with the US Congress, he used a nationally televised news conference to warn Americans that the climb out of the economic crisis will not happen overnight.

"It will take many months and many different solutions," Mr Obama,describing America as "a big ocean liner. It's not a speedboat. It doesn't turn around immediately. But we're in a better place because of the decisions that we made". He suggested that "we're beginning to see signs of progress" in part because of action his administration has already taken, including the passage a month ago of the $787bn stimulus package.

Domestic and economic concerns dominated Tuesday night's press conference – there were no questions in the hour-long session about either Iraq or Afghanistan – just as it is dominating Mr Obama's daily diary. Yesterday, the President was due on Capitol Hill to meet Congressional Democrats, some of whom have publicly voiced doubts about his proposed $3.6 trillion budget for the next fiscal year and the risk it poses of bloating the deficit.

On Tuesday, Mr Obama sought to play down any looming confrontation with Congress, even though Republican leaders continued to lambast his budget plan as irresponsible. "We never expected that when we printed out our budget that they would simply Xerox it and vote on it," he said, indicating he would be flexible in areas such as enacting tax cuts promised to the middle class.

Ahead of the President's talk on Capitol Hill, the White House budget director, Peter Orszag, told reporters that he expected the main planks of Mr Obama's plan to survive the surgery being performed on it in both the Senate and House of Representatives – an assertion not every Capitol Hill observer would agree with. He said that the revised drafts now emerging from both sides of Congress were "fully in line with the president's key priorities".

Watch the press conference


The Republican criticism of the budget, in which Mr Obama's keystone policy priorities (including health care and energy reform) are embedded, continued to be ferocious. "I see in the budget the road to financial destruction," Republican Senator Richard Shelby said. The Republican whip in the House of Representatives, Eric Cantor, said it was "so far out of the mainstream" that even Mr Obama's own party could not support it.

The budget battle is beginning even as Mr Obama is trying to calm public anger over $165m in bonuses paid by the disgraced insurance giant AIG to some of its top executives – anger that a few days ago the White House was almost stoking but which now has become a distraction that it would like to see dissipate.

Trying to find a new balance between indignation and calm, Mr Obama said at his news conference that "bankers and executives on Wall Street need to realise that enriching themselves on the taxpayers' dime is inexcusable, that the days of outsized rewards and reckless speculation that puts us all at risk have to be over". But, the President continued: "At the same time, the rest of us can't afford to demonise every investor or entrepreneur who seeks to make a profit".

Foreign policy may have faded into the background for the past few weeks, but not for much longer as Mr Obama prepares finally to unveil a new strategy on pursuing the war in Afghanistan and gets ready for a tour of European capitals next week, beginning with London on Thursday. Afghanistan was the focus of a meeting in the White House yesterday with the Nato secretary general Jaap de Hoop Scheffer.