Obama: 'Day of Reckoning' for U.S. Economy

"My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we've inherited -- a trillion-dollar deficit, a financial crisis, and a costly recession," Obama said. "But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity."

Turning his attention to the members of Congress seated before him, Obama called for sacrifices on programs and policies that will not be funded and says he will sacrifice with them.

He outlined some of the ways that his administration will begin to work on its pledge to cut the deficit in half by the end of his first term and noted that $2 trillion in savings has already been identified after a line-by-line review of the federal budget.

"In this budget, we will end education programs that don't work and end direct payments to large agribusinesses that don't need them," the president said.

"We'll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we're not paying for Cold War-era weapons systems we don't use," he continued. "We will root out the waste, fraud, and abuse in our Medicare program that doesn't make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas."

No Bailouts for Wall Street Executives

Obama had strong words for banks and their executives, saying that the days of using taxpayer money to "buy fancy drapes or disappear on a private jet" are over.

"I intend to hold these banks fully accountable for the assistance they receive, and this time, they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer," he said.

Obama sought to frame the financial rescue plan as helping the little guy, the everyday American, not the banks or Wall Street executives, and noted the ripple effect that freeing up credit will have on the economy.

"When credit is available again, that young family can finally buy a new home," he said. "And then some company will hire workers to build it. And then those workers will have money to spend, and if they can get a loan too, maybe they'll finally buy that car, or open their own business. Investors will return to the market, and American families will see their retirement secured once more. Slowly, but surely, confidence will return, and our economy will recover."

Realism vs. Optimism

In the lead-up to the address, White House officials repeatedly spoke of the balance Obama sought to strike between speaking realistically about the economic crisis while not sounding too pessimistic, being mindful of the financial markets and the weariness of the American people.

White House spokesman Robert Gibbs said on "Good Morning America" today that Obama would offer "a sober assessment about where we are and the challenges that we face."

The message and tone, according to a senior White House official, would be: "We will get through this economic hardship. ... Here are the actions necessary to take to do so."

Obama told Americans that he understood that they did not need to hear more rhetoric or statistics to know that the economy was in crisis because it is part of their daily lives.

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