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Obama Warns Of Risk Of Economic 'Catastrophe,' Looks For Iran Openings

  • Heather Maher

U.S. President Barack Obama takes a question during his first prime-time press conference in the East Room of the White House.

U.S. President Barack Obama takes a question during his first prime-time press conference in the East Room of the White House.

WASHINGTON -- In his first prime-time news conference, U.S. President Barack Obama called this "the winter of America's hardship."

Fresh off a daylong visit to a town in the state of Indiana that has been devastated by job losses, Obama said the country is in a "full blown crisis" and warned if Congress doesn't pass his economic plan immediately, the results could be catastrophic.

On foreign policy, he warned of difficult challenges ahead in Afghanistan and said his administration is looking for opportunities to engage diplomatically with Iran.

Nowhere in America has the economic crisis taken a greater toll than the city of Elkhart, Indiana, population 53,000. Over the past year, the unemployment rate has more than tripled and now stands at more than 15 percent.

That grim statistic is why Obama traveled on February 9 to Elkhart, 150 miles east of Chicago, to hold a public town-hall meeting with its citizens. They told him that things are so bad that local television stations are running public service announcements on where to find food banks, even though the shelves at many are empty.

$800 Billion Plan

Obama's description to reporters of the town's plight put a starkly human face on the U.S. economic crisis, and seemed to be aimed squarely at Republicans in Congress who don't support his $800 billion Economic Recovery and Reinvestment Plan.

My administration inherited a deficit of over $1 trillion, but because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence.
Despite winning not a single Republican vote, one version of the stimulus package has already passed the House of Representatives, and the Senate is expected to vote on its version on February 10. Passage is considered likely, but the number of Republicans who say they will vote for it can be counted on one hand.

In the news conference, Obama -- who won office promising bipartisan leadership -- said the time for debate is over. He said Washington is in "a rare moment where the citizens of our country and all countries are watching and waiting for us to lead."

The U.S. president offered a passionate defense of his economic plan, which proposes to stimulate the economy and generate 4 million jobs through a mix of tax cuts and public investment in everything from infrastructure projects to clean energy. He noted that the plan is endorsed by economists and business groups and contains unprecedented accountability and transparency measures. He called it "big enough and bold enough" to meet the size of the economic challenge facing the United States.

He also said it is "not perfect, no plan is," but said that failure to implement it would seriously worsen the situation, which he would not allow.

"My administration inherited a deficit of over $1 trillion, but because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence," Obama said.

"Those are deficits that could turn a crisis into a catastrophe and I refuse to let that happen. As long as I hold this office, I will do whatever it takes to put this economy back on track and put this country back to work," he added.

Foreign Policy Questions

Most of the questions from reporters at the press conference -- which was carried live by most national TV news networks -- dealt with the state of the economy, but a few focused on foreign policy.

One of the first was on Obama's strategy for engaging Iran, which he said he would do during last year's presidential campaign. Obama said his administration has already begun efforts on that front.

My national security team is currently reviewing our existing Iran policy, looking at areas where we can have constructive dialogue, where we can directly engage with them.
"My national security team is currently reviewing our existing Iran policy, looking at areas where we can have constructive dialogue, where we can directly engage with them," Obama said.

"And my expectation is, in the coming months, we will be looking for openings that can be created where we can start sitting across the table, face-to-face -- diplomatic overtures -- that will allow us to move our policy in a new direction," he said.

Obama praised Iran for its "extraordinary people" and history but said its support of Hizballah and Hamas, its aggressive stance toward Israel, and its disputed nuclear program are contrary to the interests of the United States and international community and threaten to destabilize the Middle East region.

He said direct talks could only take place if clear objectives were agreed, and said that even as diplomatic channels are being pursued, the United States would not soften its position on Iran's nuclear activities or terrorist funding.

Obama acknowledged that there are years of mistrust between the two countries but said he sees the possibility for a relationship of "mutual respect."

Iran, he said, must now send "some signals that it wants to act differently, as well."

'Lack Of Concerted Effort'

On Afghanistan, Obama said twice that the challenges ahead would be "difficult" and often mentioned Pakistan in the same sentence. He drew a straight line from the region to the attacks of 9/11, calling it "the base to launch an attack that killed 3,000 Americans."

And he criticized the "lack of concerted effort" to eliminate areas around the Afghan-Pakistan border as safe havens for the Taliban and Al-Qaeda.

"There is no doubt there in the FATA (Federally Administered Tribal Areas) region of Pakistan -- in the mountainous regions along the border with Afghanistan -- that there are safe havens where terrorists are operating," Obama said. "And one of the goals of Ambassador [Richard] Holbrooke, as he is traveling throughout the region, is to deliver a message to Pakistan that they are endangered as much as we are by the continuation of those operations and that we've got to work in a regional fashion to root out those safe havens."

While Iraq's recent elections went relatively smoothly and the political system is beginning to function, Obama said "you do not see that yet in Afghanistan." Despite upcoming elections of its own, he said the government of President Hamid Karzai "seems very detached."

The Obama administration is in the process of evaluating U.S. strategy in Afghanistan and has already begun plans to as much as double the current U.S. force there now. Obama said General David Petraeus, head of U.S. Central Command, is conducting his own military review in addition to working with the special U.S. envoy to Afghanistan and Pakistan, Richard Holbrooke, on a regional approach.

'Restart' Russian Talks

Obama only touched on U.S-Russia relations once during his press conference. In response to a question he avoided about which Middle Eastern countries might have nuclear weapons, Obama said he had spoken to Russian President Dmitry Medvedev about the need to work together to reduce proliferation.

"One of my goals is to prevent nuclear proliferation, generally. I think it's important for the United States, in concert with Russia, to lead the way on this, and I've mentioned this in conversations with the Russian president, Mr. Medvedev," Obama said, "to let him know that it is important for us to restart the conversations about how we can start reducing our nuclear arsenals in an effective way, so that we then have the standing to go to other countries and start stitching back together the nonproliferation treaties that, frankly, have been weakened over the last several years."

Coming less than a month after Obama took office, the February 9 meeting with reporters was one of the earliest prime-time presidential press conferences in modern history. Obama's predecessor, George W. Bush, didn't give his first formal press conference until nine months into his presidency.

Bush actually came up once during questioning, when a reporter asked whether Obama endorsed a move by Democratic Senator Patrick Leahy of Vermont to conduct an official investigation of potential crimes by the Bush administration.

Obama said he had not seen the proposal but that no one is above the law and in a case of wrongdoing, "people should be prosecuted just like any ordinary citizen."

But, he added, he is more interested in looking forward than he is in looking backward.

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