Obama Pushes for More Financial Regulation in Wall Street Speech

On the one-year anniversary of the collapse of financial giant Lehman Brothers, President Obama said the economic storms of the past two years "are beginning to break," but he issued a stern warning to the nation's financial firms that as the economy recovers, they cannot revert to the days of "reckless behavior and unchecked excess."

"The old ways that led to this crisis cannot stand," the president said. "History cannot be allowed to repeat itself."

Obama delivered his remarks at Federal Hall in the heart of New York's financial district, just steps away from the New York Stock Exchange, to an audience that included members of Congress, the financial community and key members of his administration's economic team.

Video of President Barack Obama says we need financial oversight, one year after Lehman Brothers collapse.Play

The president said Wall Street firms need to take responsibility for past excesses and learn from mistakes.

"Normalcy cannot lead to complacency," Obama said. "Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall."

The president spread the blame for last year's economic meltdown, saying it falls on the shoulders of those on Wall Street, in Washington and across America.

VIDEO: Can the president juggle both health care and the economy?Play

"[W]hat took place one year ago was not merely a failure of regulation or legislation; it was not merely a failure of oversight or foresight," Obama said. "It was a failure of responsibility that allowed Washington to become a place where problems -- including structural problems in our financial system -- were ignored rather than solved. It was a failure of responsibility that led homebuyers and derivative traders alike to take reckless risks they couldn't afford."

Obama said Wall Street firms who were bailed out by the government last year now need to play a significant role in rebuilding trust among the American people.

"The fact is, many of the firms that are now returning to prosperity owe a debt to the American people," the president said. "Though they were not the cause of the crisis, American taxpayers through their government took extraordinary action to stabilize the financial industry."

Tens of thousands gathered in Washington this weekend to protest what they said was the Obama administration's irresponsible expansion of government and big spending. Today Obama said the need for government involvement in the financial system is "waning."

"After months in which public dollars were flowing into our financial system, we are finally beginning to see money flowing back to the taxpayers," he said.

Obama called for immediate action on regulatory reform, reiterating his support for new rules to protect American consumers and a Consumer Financial Protection Agency to enforce the rules. With the G-20 economic summit taking place next week in Pittsburgh, Obama said world leaders will address ways "to spur global demand but also to address the underlying problems that caused such a deep and lasting global recession."

Obama defended his administration's recent decision to levy higher tariffs on imported Chinese tires saying that the move was "not to be provocative or to promote self-defeating protectionism" but necessary to maintain an "open and free trading system."

"This administration is committed to pursuing expanded trade and new trade agreements. It is absolutely essential to our economic future," the president said. "But no trading system will work if we fail to enforce our trade agreements."

The president stressed in television interviews on Monday that there will not be a trade war with China over the tire tariffs.

"I think that there are some tensions around this, no doubt about it. But my message is very simple: We have rules on the books," he said in an interview with Bloomberg News. "We've got to establish credibility and enforcement of the rules precisely because I want to further expand trade in the future. And that is something that I think the Chinese government should understand."

Health Care Reform Still Dominates Agenda

The president's message today was tough, but his regulatory agenda has been sidetracked because of his focus on, and struggles with, health care reform.

"The chance for regulatory reform is starting to slip away from us, that we need very definitely in place some sort of better system of monitoring and of regulation, otherwise we are going to get right back into the soup again," said political analyst David Gergen. "I think ... the regulatory reform effort is a casuality of the health care fight, because health care is so dominant that the president can't get attention back to regulatory reform and the Senate is so caught up in health care that it is going to be very difficult to get regulatory reform done this year."

Meanwhile, support for the president's health care push, headlined by his address to the joint session of Congress last Wednesday, remains divided. The president's speech did little to change Americans' perception of the administration's health care overhaul efforts, but generally, views on reform have stabilized from what were plummeting poll numbers for the president.

The latest ABC News/Washington Post poll shows that the country is divided 48-48 percent on Obama's handling of health care reform. That figure is down from April, when 57 percent of approved and 29 percent disapproved. More Americans believe reform will worsen rather than improve their coverage and costs while nearly two-thirds of those polled believe it will boost the hefty federal deficit. According to the poll, more than half -- 54 percent -- of Americans say that the more they hear about health care reform, the less they like it.

That may not bode well for the president, who has acknowledged Americans' concerns but at the same time, insists that he will continue pressing for the strongest bill he can.

"I intend to be president for a while and once this bill passes, I own it," Obama said in an interview with CBS' "60 Minutes" Sunday. "And if people look and say, 'You know what? This hasn't reduced my costs. My premiums are still going up 25 percent, insurance companies are still jerkin' me around,' I'm the one who's going to be held responsible."

The president also insists that health care reform won't add to the federal budget deficit "by a dime."

"We spend over $2 trillion on health care every year. So we spend more per person on health care in this country than any other country by far," Obama said. "So if we can just make some small changes that make the system more efficient, the waste and abuse, this -- the money that's already being spent that's not making people healthier, that money can go to provide a better deal for those without insurance. And, over time, can actually reduce the cost for those who already have health insurance."

Americans Divided on Health Care

At a health care rally in Minneapolis on Saturday, the president once again tried to fire up Americans with his call for a "season for action."

"I may not be the first president to take up the cause of health care reform, but I am determined to be the last," Obama said to a cheering audience.

But many Americans are not convinced, and across the country, thousands of conservative protestors came from around the nation to Washington, D.C., for "Tea Party" protests, to tell the president they oppose a health care bill and any other government spending.

"We're true hot-blooded Americans and concerned about what's going on in our government," said Stephanie Crise, who flew with her family from Dallas to join the protests. "We're worried about the spending. We're worried the corruption that's happening. We're worried the lies we're getting."

Experts say the protest is a sign of the deep divide on this very sensitive issue.

"The demonstration on Saturday sent a clear signal that even though the president gave this speech to the Congress Wednesday night, the country remains deeply polarized about health care," Gergen said.

"Clearly the country does feel fatigued. And I think the single greatest item that is now a drag on health care reform is a sense in the country -- too much, too fast, too expensive -- slow it down," Gergen said. "And that more than the details on health care reform itself, people are worried about how much this costs, how much of that is the deficit, what does that mean to the long-term costs."

The president says he understands the anxiousness among Americans, having gone through the worst economic crisis in history since the Great Depression, and a deepening deficit.

"This is a very difficult economic environment. People are feeling anxious," Obama said on "60 Minutes." "And I think it is absolutely fair to say that people started feeling some sticker shock. So there is an argument to be made out there that -- that maybe health care can just wait."

But the president also insists that health care reform is key to reducing the deficit and cutting costs in the long term.

"The problem I've got is that the only way I can get medium and long-term federal spending under control is if we do something about health care. Ironically, health care reform is critical to deficit reduction," he said.

ABC News' Huma Khan contributed to this report.