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Economic crisis holds ‘more pain’

President Barack Obama delivers remarks on the economy Tuesday at Georgetown University in Washington.

President Barack Obama delivers remarks on the economy Tuesday at Georgetown University in Washington.

WASHINGTON — President Obama called on Congress Tuesday to tackle unpopular tasks it has avoided for decades, such as overhauling the nation’s health care and retirement systems, or risk continued economic crises.

In a speech at Georgetown University that was billed as a tally of his administration’s three-month effort to end the recession, Obama said action on health care, energy, education, financial regulation and deficit reduction is needed for a long-term recovery.

“We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock,” he said, referring to a parable at the end of the Sermon on the Mount. “We must lay a new foundation for growth and prosperity — a foundation that will move us from an era of borrow and spend to one where we save and invest.”

Obama’s call for long-term fiscal discipline was criticized by some Republicans. House Minority Leader John Boehner, R-Ohio, said the president hasn’t led on overhauling entitlement programs such as Medicare and Social Security, which are on unsustainable paths as benefits outstrip revenue.

“Instead of embracing tough decisions, Democrats have avoided them in favor of saddling our children and grandchildren with mountains of debt that we know they cannot afford,” Boehner said.

The president’s speech was intended to warn against public or congressional complacency. As stock markets start to rebound and credit begins to flow, the administration does not want to lose momentum in its effort to restructure the economy.

“The president believes that it’s important to continue to let people know that we’ve got a lot of work to do,” White House spokesman Robert Gibbs said. “We’re going to have to tackle some things that have not been addressed in quite some time in order to put ourselves back on a path to fiscal responsibility.”

Obama warned of more “difficult and unpopular choices” in the months ahead as the economy continues to struggle. Addressing a largely supportive student audience, he painted a grim picture of the economy, even as he noted “glimmers of hope” among rising unemployment and declining growth figures.

This year “will continue to be a difficult year for America’s economy,” the president said. “The severity of this recession will cause more job loss, more foreclosures and more pain before it ends.”

The somewhat pessimistic outlook was endorsed by Mark Zandi, chief economist at Moody’s Economy.com, who said Obama doesn’t want lawmakers to lose their sense of urgency.

“I don’t feel like we’re out of the woods by a long shot,” Zandi said. “There are a few rays of sunshine, but they can go back behind the clouds pretty fast.”

Obama singled out plans for restructuring American International Group, the giant insurance company, and auto companies, saying that process “will involve difficult and sometimes unpopular choices.” Chrysler and General Motors face the prospect of more cutbacks and possible bankruptcies under the administration’s watchful eye.

Actions taken in the first three months of the administration — including nearly $800 billion in government spending, rescue plans for banking, housing and non-bank credit markets, and the auto bailouts — have helped. But more is needed, Obama said.

“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,” he said. “I’d love it if these problems were coming at us one at a time instead of five or six at a time. 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.”

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This archive contains all the stories that appeared on the Tucson Citizen's website from mid-2006 to June 1, 2009.

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