Fallout: The Financial Crisis

Obama makes case for spending plan

John Dimsdale Mar 25, 2009
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Fallout: The Financial Crisis

Obama makes case for spending plan

John Dimsdale Mar 25, 2009
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TEXT OF INTERVIEW

KAI RYSSDAL: It’s been six weeks, give or take, since President Obama’s last prime-time press conference. Since then the Dow has gone farther down — back up some. AIG bonuses have been paid out — reclaimed, in part. His Treasury secretary has shared the details of the bank bailout with us. There’s a budget being debated on Capitol Hill. And sooner or later we’re gonna get new rules for Wall Street to live by, too.

So the president took to the podium this evening with plenty to talk about. Our Washington Bureau Chief John Dimsdale is with us to talk about what the president was talking about.

Hiya, John.

JOHN DIMSDALE: Hello, Kai.

RYSSDAL: This was the bully pulpit, right, trying to sell that economic plan?

DIMSDALE: Yeah, and he’s having a tough time, partly because of the sheer complexity of this problem. You know, there’s no easy way to explain what’s going on on so many fronts with this financial gridlock — banks not lending, homes being foreclosed. So, in his opening statement, the president acknowledged that there are no silver bullets to solve this.

PRESIDENT OBAMA: We’ll recover from this recession, but it will take time, it will take patience, and it will take an understanding that when we all work together, when each of us looks beyond our own short-term interests to the wider set of obligations we have towards each other, that’s when we succeed. That’s when we prosper. And that’s what is needed right now.

RYSSDAL: And that led right to the first question, John, which actually was about Secretary Geithner and the chairman of the Fed, Ben Bernanke, today up on Capitol Hill, asking for new rules on how to keep an eye on the banking system.

DIMSDALE: That’s right. They want these sweeping powers to have the government take over non-bank financial firms — insurance companies, hedge funds — the same way the FDIC takes over failing banks. That’s being called a major power grab by government, by some of the Republicans up on the Hill. But the president defended that plan today.

PRESIDENT OBAMA: I think that there’s going to be strong support from the American people and from Congress to provide that authority so that we don’t find ourselves in a situation where we’ve got to choose between either allowing an enormous institution like AIG, which is not just insuring other banks, but is also insuring pension funds and potentially putting people’s 401(k)’s at risk if it goes under. That’s one choice. And then the other choice is just to allow them to take taxpayer money without the kind of conditions that we’d like to see on it.

RYSSDAL: And there will, in fact, be more hearings on that later this week on Capitol Hill and in weeks to come I’m sure. John, I want to get back to the idea that the president has to convince the American public of the soundness of his plan. He also talked tonight about his budget. And he said it was inseparable from the recovery plan.

DIMSDALE: Yeah, it’s a huge, ambitious increase in spending, with all sorts of new initiatives — health care, education, energy. And that’s why even moderate Democrats are beginning to balk at all the spending. They’re recommending rolling back some of this, some of the more ambitious goals like cap and trade emission credits for greenhouse gases. The Congresssional Budget Office says he’s creating deficits, the president’s budget is creating deficits that are 25 percent higher than what the White House is anticipating. President Obama said today that that’s because he’s estimating faster growth in the out years of the 10-year budget.

PRESIDENT OBAMA: Here’s what I do know: If we don’t tackle energy, if we don’t improve our education system, if we don’t drive down the costs of health care, if we’re not making serious investments in science and technology and our infrastructure, then we won’t grow 2.6 percent, we won’t grow 2.2 percent. We won’t grow.

RYSSDAL: And we’ll get a look at what the actual growth figures were for the fourth quarter last year in a couple of weeks.

Marketplace’s John Dimsdale in Washington. Thank you, John.

DIMSDALE: Thank you, Kai.

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