September 30, 2008
Remarks as prepared for delivery by Barack Obama in Reno, Nevada today: This morning - like so many others over the last few months - we woke up to some very sobering news about our economy. Over the course of a few hours, the failure to pass the economic rescue plan in Washington led to the single largest decline of the stock market in two decades.
Over one trillion dollars of wealth was lost by the time the markets closed on Monday. And it wasn't just the wealth of a few CEOs or Wall Street executives. The 401Ks and retirement accounts that millions count on for their family's future are now smaller. The state pension funds of teachers and government employees lost billions upon billions of dollars. Hardworking Americans who invested their nest egg to watch it grow are now watching it disappear.
But while the decline of the stock market is devastating, the consequences of the credit crisis that caused it will be even worse if we do not act and act immediately.
Because of the housing crisis, we are now in a very dangerous situation where financial institutions across this country are afraid to lend money. If all that meant was the failure of a few big banks on Wall Street, it would be one thing.
But that's not what it means. What it means is that if we do not act, it will be harder for you to get a mortgage for your home or the loans you need to buy a car or send your children to college. What it means is that businesses won't be able to get the loans they need to open new factories, or hire more workers, or make payroll for the workers they have. What it means is that thousands of businesses could close. Millions of jobs could be lost. A long and painful recession could follow.
Let me be perfectly clear. The fact that we are in this mess is an outrage. It's an outrage because we did not get here by accident. This was not a normal part of the business cycle. This was not the actions of a few bad apples.
This financial crisis is a direct result of the greed and irresponsibility that has dominated Washington and Wall Street for years. It's the result of speculators who gamed the system, regulators who looked the other way, and lobbyists who bought their way into our government. It's the result of an economic philosophy that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else; a philosophy that views even the most common-sense regulations as unwise and unnecessary. And this economic catastrophe is the final verdict on this failed philosophy - a philosophy that we cannot afford to continue.
But while there is plenty of blame to go around and many in Washington and on Wall Street who deserve it, all of us now have a responsibility to solve this crisis because it affects the financial well-being of every single American. There will be time to punish those who set this fire, but now is the moment for us to come together and put the fire out.
This is one of those defining moments when the American people are looking to Washington for leadership. It is not a time for politics. It is not a time for partisanship. It is not a time to figure out how to take credit or where to lay blame. It is not a time for politicians to concern themselves with the next election. It is a time for all of us to concern ourselves with the future of the country we love. This is a time for action.
I know that many of you are feeling anxiety right now - about your jobs, about your homes, about your life savings. But I also know this - I know that we can steer ourselves out of this crisis. Because that's who we are. Because this is the United States of America. This is a nation that has faced down war and depression; great challenges and great threats. And at each and every moment, we have risen to meet these challenges - not as Democrats, not as Republicans, but as Americans. With resolve. With confidence. With that fundamental belief that here in America, our destiny is not written for us, but by us. That's who we are, and that's the country we need to be right now.
This is no longer just a Wall Street crisis - it's an American crisis, and it's the American economy that needs this rescue plan. I understand why people would be skeptical when this President asks for a blank check to solve a problem. I've spent most of my time in Washington being skeptical of this Administration, and this time was no different. That's why over a week ago, I demanded that this plan include specific proposals to protect American taxpayer - protections that the Administration eventually agreed to, as well as Democrats and Republicans in Congress.
First, I said we needed an independent board to provide oversight and accountability for how and where this money is spent at every step of the way.
Second, I said that we cannot help banks on Wall Street without helping the millions of innocent homeowners who are struggling to stay in their homes. They deserve a plan too.
Third, I said that I would not allow this plan to become a welfare program for the Wall Street executives whose greed and irresponsibility got us into this mess.
And finally, I said that if American taxpayers are financing this solution, then you should be treated like investors - you should get every penny of your tax dollars back once this economy recovers.
This last part is important, because it's been the most misunderstood and poorly communicated aspect of this entire plan. This is not a plan to just hand over $700 billion of your money to a few banks on Wall Street. If this is executed the right way, then the government will temporarily purchase the bad assets of our financial institutions so that they can start lending again, and then sell those assets once the markets settle down and the economy recovers. If this is managed correctly, we will hopefully get most or all of our money back, or possibly even turn a profit on the government's investment - every penny of which will go directly back to you, the investor. And if we do have losses, I've proposed to institute a Financial Stability Fee on the entire financial services industry so that Wall Street foots the bill - not the American taxpayer. I've also said that if I'm President, I will review the entire plan on the day I take office to make sure that it is working to save our economy and that you are getting your money back.
Even with all these taxpayer protections, I know that this plan is not perfect or fool-proof. No matter how well we manage the government's investments under this plan, we are still putting taxpayer dollars at risk. I know that there are Democrats and Republicans in Congress who have legitimate concerns about this, and I know there are many Americans who share those concerns.
But I also know that we can't afford not to act. Both parties are close to accepting this plan, and over the next few hours and days, we should seek out any new ideas that might get this done. This morning, I proposed one such idea that might increase bipartisan support for this plan and shore up our economy at the same time: expanding federal deposit insurance for families and small businesses across America who have invested their money in our banks.
The majority of American families should rest assured that the deposits they have in our banks of up to $100,000 are still guaranteed by the federal government. That guarantee is more than adequate for most families, but it is insufficient for many small businesses to meet their payroll, buy their supplies, and create new jobs. The current insurance limit of $100,000 was set 28 years ago and has not been adjusted for inflation. I've proposed raising the FDIC limit to $250,000 - a step that would boost small businesses, make our banking system more secure, and help restore confidence by reassuring families that their money is safe.
That's one idea. If there are others that can help shore up support for this plan and shore up our economy, I encourage Democrats and Republicans to offer them. But we must act and we must act now. We cannot have another day like yesterday. We cannot risk another week or another month where American businesses are afraid to extend credit and lend money. That is not an option for this country.
For the rest of today and as long as it takes, I will continue to reach out to leaders in both parties and do whatever I can to help pass a rescue plan. To the Democrats and Republicans who opposed this plan yesterday, I say - step up to the plate and do what's right for this country. And to all Americans, I say this - if I am President of the United States, this rescue plan will not be the end of what we do to strengthen this economy - it will only be the beginning.
People have asked whether the size of this plan, together with the weakening economy, means that the next President will have to scale back his agenda and some of his proposals. The answer is both yes and no. With less money flowing into the Treasury, it is likely that some useful programs or policies that I've proposed on the campaign trail may need to be delayed. And I've said that as President, I will go through the federal budget, line by line, eliminating programs that no longer work and making the ones we do need work better and cost less.
But there are certain investments in our future that we cannot delay precisely because our economy is in turmoil. You can always put off giving your house a new paint job or renovating your kitchen, but when your roof is crumbling or your heater goes, you realize that these are long-term investments you need to make right away.
The same is true of our economy. We cannot wait to help Americans keep up with rising costs and shrinking paychecks by giving our workers a middle-class tax cut. We cannot wait to relieve the burden of crushing health care costs on families, businesses, and our entire economy. We cannot wait to create millions of new jobs by rebuilding our roads and our bridges and investing in the renewable sources of energy that will stop us from sending $700 billion a year to tyrants and dictators for their oil. And we cannot wait to educate the next generation of Americans with the skills and knowledge they need to compete with any workers, anywhere in the world. Those are the priorities we cannot delay.
As soon as we pass this rescue plan, we need to move with the same sense of urgency to rescue the families on Main Street who are struggling every day to pay their bills and keep their jobs. I've said it before and I'll say it again: we need to pass an economic stimulus plan that will help folks cope with rising food and gas prices, save one million jobs by rebuilding our schools and roads, and help states and cities avoid budget cuts and tax increases. A plan that would extend expiring unemployment benefits for those Americans who've lost their jobs and cannot find new ones.
Beyond this immediate stimulus that I've called on both parties and the President to pass, we need an economic agenda to restore opportunity for Americans and prosperity to America. We need policies that will grow this economy from Main Street to Wall Street and everywhere in between - so that the 21st century is another American century. So that we're not borrowing debt from China and buying oil from Saudi Arabia. So that the jobs of the future don't go to better-educated workers in India and the cars of the future aren't made in Japan. So that we can leave a legacy of greater opportunity to our children and their children. That is how we will emerge from this crisis stronger and more prosperous than we were before, and that is what I will do as President of the United States.
I will begin by reforming our tax code so that it doesn't reward the lobbyists who wrote it, but the American workers and small businesses who deserve it. I will eliminate capital gains taxes for small businesses and start-ups, so that we can grow our economy and create the high-wage, high-tech jobs of tomorrow.
I will cut taxes - cut taxes - for 95% of all workers and their families. And if you make less than $250,000 a year, you will not see your taxes increase one single dime - because in an economy like this, the last thing we should do is raise taxes on the middle-class.
I will reform our health care system to relieve families, businesses, and the entire economy from the crushing cost of health care by investing in new technology and preventative care. If you have health care, my plan will lower your premiums. If you don't, you'll be able to get the same kind of coverage that members of Congress give themselves. And I will stop insurance companies from discriminating against those who are sick and need care the most.
To create new jobs, I'll invest in rebuilding our crumbling infrastructure - our roads, schools, and bridges. We'll rebuild our outdated electricity grid and build new broadband lines to connect America. And I'll create the jobs of the future by transforming our energy economy. We'll tap our natural gas reserves, invest in clean coal technology, and find ways to safely harness nuclear power. I'll help our auto companies re-tool so that the fuel-efficient cars of the future are built right here the United States of America. I'll make it easier for the American people to afford these new cars. And I'll invest 150 billion dollars over the next decade in affordable, renewable sources of energy - wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and five million new jobs that pay well and can't ever be outsourced
And if I am President, I will meet our moral obligation to provide every child a world-class education, because it will take nothing less to compete in the global economy. I'll invest in early childhood education. I'll recruit an army of new teachers, and pay them higher salaries and give them more support. But in exchange, I will ask for higher standards and more accountability. And we will keep our promise to every young American - if you commit to serving your community or your country, we will make sure you can afford a college education.
Finally, I will modernize our outdated financial regulations and put in the place the common-sense rules of the road I've been calling for since March - rules that will keep our market free, fair, and honest; rules that will make sure Wall Street can never get away with the stunts that caused this crisis again. And I will take power away from the corporate lobbyists who think they can stand in the way of these reforms. I've done it in Illinois, I've done it Washington, and I will do it again as President.
These are the changes and reforms that we need. Bottom-up growth that will create opportunity for every American. Investments in the technology and innovation that will restore prosperity and lead to new jobs and a new economy for the 21st century. Common-sense regulations for our financial system that will prevent a crisis like this from ever happening again.
I won't pretend this will be easy or come without cost. We will all need to sacrifice and we will all need to pull our weight because now more than ever, we are all in this together. What this crisis has taught us is that at the end of the day, there is no real separation between Main Street and Wall Street. There is only the road we're traveling on as Americans - and we will rise or fall on that journey as one nation; as one people.
This country and the dream it represents are being tested in a way that we haven't seen in nearly a century. And future generations will judge ours by how we respond to this test. Will they say that this was a time when America lost its way and its purpose? When we allowed our own petty differences and broken politics to plunge this country into a dark and painful recession?
Or will they say that this was another one of those moments when America overcame? When we battled back from adversity by recognizing that common stake that we have in each other's success?
I believe that this is one of those moments. I know that many of you are anxious about your future and the future of this country. I realize that you are cynical and fed up with politics. I understand that you are disappointed and even angry with your leaders. You have every right to be. But despite all of this, I ask you to believe - believe in this country and your ability to change it. I ask you what has been asked of the American people in times of trial and turmoil throughout our history - what was asked at the beginning of the greatest financial crisis this nation has ever endured. In his first fireside chat, Franklin Roosevelt told his fellow Americans that "..there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people themselves. Confidence and courage are the essentials of success in carrying out our plan. Let us unite in banishing fear. Together, we cannot fail."
America, together, we cannot fail. Not now. Not when we have a crisis to solve and an economy to save. Not when there are so many Americans without jobs and without homes. Not when there are families who can't afford to see a doctor, or send their child to college, or pay their bills at the end of the month. Not when there is a generation that is counting on us to give them the same opportunities and the same chances that we had for ourselves. Now is the time to make them proud of what we did here. Let's give our children the future they deserve, and let's act with confidence and courage to show the world that at this moment, in this election, the United States of America is still the last, best hope of Earth
(AP Photo/Alex Brandon)
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