Obama says stimulus vital to avoid 'catastrophe'

Obama used the first prime-time news conference of his presidency to warn that a failure to act swiftly and boldly "could turn a crisis into a catastrophe."

With the nation falling deeper into a long and painful recession, Obama defended his program against Republican criticism that it is loaded with pork-barrel spending and will not create jobs.

"The plan is not perfect," the president said. "No plan is. I can't tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans."

Obama addressed the nation from the East Room of the White House in a news conference that lasted almost exactly one hour. He hit repeatedly at the themes he has emphasized in recent weeks, including at a town hall meeting to promote his plan earlier in the day in Elkhart, Ind.

When the stimulus bill passed the House last month, not a single Republican voted for it. On Monday an $838 billion version of the legislation cleared a crucial test vote in the Senate by a 61-36 margin, with all but three Republican senators opposing it.

Obama said he had made a deliberate effort to reach out to the GOP, putting three Republicans into his Cabinet, and "as I continue to make these overtures, over time, hopefully that will be reciprocated."

"So my bottom line when it comes to the recovery package is: send me a bill that creates or saves 4 million jobs."

Obama acknowledged the difficulty of mending political divisions between Republicans and Democrats.

"Old habits are hard to break," he said. "We're coming off an election, and people sort of want to test the limits of what they can get. There's a lot of jockeying in this town and who's up and who's down, testing for the next election."

Obama said the federal government was the only power that could save the nation at a time of crisis, with huge spending outlays and tax cuts.

"At this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life," he said.

Rejecting criticism that the emphasis on federal action was too great, he said that 90 percent of the jobs created by the plan would be in the private sector, rebuilding crumbling roads, bridges and other aging infrastructure.

"The plan that ultimately emerges from Congress must be big enough and bold enough to meet the size of the economic challenge we face right now," Obama said.

Again and again, he stressed that the economy is in dire straits.

"This is not your ordinary, run of the mill recession," he said. Obama said the United States aims to avoid the kind of economic pain that Japan endured in the 1990s - the "lost decade" when that nation showed no economic growth.

"My bottom line is to make sure that we are saving or creating 4 million jobs," he said, and that homeowners facing foreclosure receive some relief.

While Obama focused on the economy in the opening minutes of the news conference, he also faced questions on foreign policy. He was asked how his administration would deal with Iran, a nation accused by the United States of supporting terrorism and pursuing nuclear weapons.

The president said his administration was reviewing its policy toward Iran "looking at places where we can have constructive dialogue." He also said it was time for Iran to change its behavior.

"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," Obama said.

He said that Iran must understand that funding terrorist organizations and pursuing nuclear weapons are unacceptable.

Obama tried to brace the U.S. for tougher sacrifices ahead in Afghanistan, where he said the national government is limited and terrorists still find places to hide and hinder coalition efforts.

An estimated 33,000 U.S. troops currently are in Afghanistan, and the Pentagon is expected to almost double that presence. So just as Obama is planning to pull troops out of Iraq, he is sending more into Afghanistan.

"I do not have a timetable for how long that's going to take," he said. "What I know is I'm not going to allow al-Qaida and (Osama) bin Laden to operate with impunity, planning attacks."

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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