Obama warns of tough choices ahead for economy

WASHINGTON -- President Obama warned Tuesday of more "difficult and unpopular choices" in the months ahead as the nation's economy continues to struggle, and he urged Congress to act on his long-term agenda.

In a 45-minute speech to a largely student audience at Georgetown University, Obama painted a grim picture of the economy, even as he noted "glimmers of hope" among the cascade of 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 market will continue to rise and fall. Credit is still not flowing nearly as easily as it should."

Obama singled out plans for restructuring American International Group, the giant insurance company, and the Big Three 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.

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.

Though actions taken in the first three months of the administration have helped — including nearly $800 billion in new government spending, rescue plans for banking, housing and non-bank credit markets, and the auto bailouts — Obama wants Congress to consider longer-term measures.

Those include an overhaul of the nation's health care system, which could include cuts in Medicare and Medicaid, and investments in alternative forms of energy and education, from preschool to college.

"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," Obama 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."