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

In his first address to a joint session of Congress, President Obama told the American people that the "day of reckoning" has arrived for the nation's economy, which he pledged to not just fix but make stronger than it was before the current crisis.

"Now is the time to act boldly and wisely -- to not only revive this economy, but to build a new foundation for lasting prosperity," the president said in his televised prime-time address.

Obama was greeted with thunderous applause in the House chamber, as lawmakers reached out to try and get a handshake or, in some cases, a kiss as the president made his way down the narrow aisle to the podium.

Obama is enjoying a 68 percent approval rating after his first month in office, according to the latest ABC News-Washington Post poll, and his pledge to reverse the nation's economic woes earned him an early standing ovation from both Democrats and Republicans.

"While our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before," Obama said.

Obama laid out proposals in energy, health care and education policy that he said would help everyday Americans struggling with rising costs and would be long-term investments toward economic recovery.

Without mentioning his predecessor by name, Obama seemed to point the finger at the Bush administration when he spoke of a period when "short-term gains were prized over long-term prosperity" and "critical debates and difficult decisions were put off for some other time on some other day."

But the president said he was not there to "lay blame or look backwards," but explained that in order to fix the problems, it is necessary to consider how the country got to this point.

Long-term Investments and Budget Cuts

Tonight, Obama spoke about the stimulus plan and financial market stability plan as immediate, short-term actions taken by his administration to jump-start the economy. But in order to fully restore the economy, he called for long-term investments in energy independence, health care, and education in order to create new jobs, industries and renewed global competitiveness.

"The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren't preparing our children and the mountain of debt they stand to inherit. That is our responsibility," the president said.

Obama did not devote much time to foreign policy, noting that he will soon announce a plan for ending the war in Iraq. He did note that the budget he will release this week would include the full costs of those wars, a shift from the Bush administration's practice of using supplemental appropriations bills to fund Iraq and Afghanistan and keep the costs outside of the official budget.

Obama called that first budget "a vision for America ... a blueprint for our future."

"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.

"It's the worry you wake up with and the source of sleepless nights. It's the job you thought you'd retire from but now have lost; the business you built your dreams upon that's now hanging by a thread; the college acceptance letter your child had to put back in the envelope," he said. "The impact of this recession is real, and it is everywhere."

In an interview with ABC News' Charles Gibson earlier today, Obama senior adviser David Axelrod said the speech tonight was going to give the president an opportunity to speak beyond the audience in front of him in the House chamber.

"[F]undamentally, this is a chance to speak to the American people, to be direct and open and blunt about where we are and where we need to go," Axelrod said. "And I think he wants to take advantage of that opportunity."

Republican Gov. Jindal : Democrats' Economic Plan 'Irresponsible'

In the Republican response to tonight's presidential address Louisiana Gov. Bobby Jindal took aim at the Democratic Party for the $787 billion stimulus legislation, which he has strongly opposed.

Jindal, often mentioned as a potential 2012 Republican presidential candidate, charged that the stimulus legislation will not help the economy grow but will increase the size of government and "saddle future generations with debt."

"It's irresponsible. And it's no way to strengthen our economy, create jobs, or build a prosperous future for our children." Jindal said in Baton Rouge, La. "To solve our current problems, Washington must lead. But the way to lead is not to raise taxes and put more money and power in the hands of Washington politicians. The way to lead is by empowering you -- the American people. Because we believe that Americans can do anything."

First Lady Michelle Obama's Guests

First lady Michelle Obama was joined in her box at tonight's address by more than two dozen people representing a range of backgrounds, states and political views.

Mrs. Obama sat with two governors, Republican Jim Douglas of Vermont, who supported the president on the stimulus bill, and Democrat Ted Strickland of Ohio, a 2008 battleground state.

Several Washington-area students also attended the address as guests of the first lady, part of Obama's pledge to reach out to their new community.

Other guests reflect accomplishments of the month-old Obama administration. Blake Jones, the co-founder and president of Namaste Solar, met with President Obama last week for a tour of his company's solar installation in Denver and spoke about how he will benefit from the stimulus plan.

Lilly Ledbetter is the namesake for the first piece of legislation the president signed in office -- the Lilly Ledbetter Fair Pay Restoration Act, which makes it an act of discrimination to pay workers unfairly.