CHICAGO – President-elect Barack Obama braced the country for more tough times Sunday, saying twice in an interview that the nation’s already dismal economy would continue to worsen in the months ahead.
Obama, speaking to Tom Brokaw on NBC’s “Meet the Press,” used some of his starkest language yet to underscore the severity of the challenge he’ll face upon taking office next month.
“If you look at the unemployment numbers that came out yesterday, if you think about almost 2 million jobs lost so far, if you think about the fragility of the financial system and the fact that it is now a global financial system so that what happens in Thailand or Russia can have an impact here, and obviously what happens on Wall Street has an impact worldwide, when you think about the structural problems that we already had in the economy before the financial crisis, this is a big problem, and it's going to get worse,” he said in the interview taped Saturday.
Later in the interview Obama reiterated his downbeat projection, saying, “Things are going to get worse before they get better.”
Obama’s assessment, offered with an eye toward lowering the already considerable expectations on his shoulders, comes two days after the worst monthly job losses in over three decades, and a day after he proposed a series of ways to marry job-creation with infrastructure improvements in the forthcoming economic stimulus package.
In the wide-ranging appearance, Obama once again gave strong indications that he’s backing off his stance on two key campaign pledges – whether to repeal President George W. Bush’s tax cuts for the rich, and his call for bringing U.S. combat troops home from Iraq in 16 months. On a lighter note, he sketched a vision of an Obama White House alive with cultural and musical events, saying he hoped to include children from local Washington, D.C., schools.
But the economy dominated the discussion. Obama, who has been largely restrained from leveling political criticism during the transition period, took shots at Congress and the current administration for their handling of the crisis.
He told Brokaw that decisions based on where to focus infrastructure improvements would be based on merit, and “not in the old, traditional politics-first way.”
In an unambiguous brush-back to his former colleagues Obama said, “You know, the days of just pork coming out of Congress as a strategy, those days are over.”
And after weeks of public magnanimity toward the Bush administration and much cooperation between the outgoing and incoming economic teams, Obama expressed irritation at what he described as a lack of urgency on the part of the incumbent about offering mortgage assistance to struggling homeowners.
“I'm disappointed that we haven't seen quicker movement on this issue by the administration,” Obama said. “We have said publicly and privately that we want to see a package that helps homeowners not just because it's good for that particular homeowner; it's good for the community.’
But pressed by Brokaw if he or his advisers had conveyed their unhappiness on the mortgage question to the Bush administration, Obama dodged. “We have specifically said that moving forward we have to have a housing component to any actions that we take. If we are only dealing with Wall Street and we're not dealing with Main Street, then we're only handling one half of the problem,” he said.
Obama also wouldn’t delve too deeply into the woes of the automakers, or answer specifically if they should be given government oversight, but did make clear he wanted to see financial assistance to the Big Three tied to reforms.
“They're going to have to restructure, and all their stakeholders are going to have to restructure—labor, management, shareholders, creditors—everybody is going to recognize that they have—they do not have a sustainable business model right now,” Obama said.
“And if they expect taxpayers to help in that adjustment process, then they can't keep on putting off the kinds of changes that they frankly should have made 20 or 30 years ago. If they want to survive, then they better start building a fuel-efficient car. And if they want to survive, they've got to recognize that the auto market is not going to be as large as some of their rosy scenarios that they put forward over the last several years.”
On taxes, the president-elect suggested he would avoid any increases in the near term. He rejected the prospect of putting a fuel surcharge on falling gas prices to fund alternative energy, saying that “putting additional burdens on American families right now, I think, is a mistake.”
And he signaled that his campaign pledge to raise taxes on the rich may be put off, something his economic advisers have been saying quietly for weeks.
“My economic team right now is examining -- do we repeal that through legislation?” Obama said of the Bush tax cuts for those Americans making over $250,000 per year. “Do we let it lapse so that, when the Bush tax cuts expire, they're not renewed when it comes to wealthiest Americans?”
On other topics:
-- Obama, as he did in announcing his national security team last week, appeared to back off his campaign pledge of returning all U.S. combat troops from Iraq in 16 months.
He only said he wanted to do so “as quickly as we can do to maintain stability in Iraq, maintain the safety of U.S. troops, to provide a mechanism so that Iraq can start taking more responsibility as a sovereign responsibility for its own safety and security, ensuring that you don't see any resurgence of terrorism in Iraq that could threaten our interests.”
--He also again declined to weigh in with any great detail on the aftermath of the bombings in Mumbai, but he did offer guarded praise for the actions of Pakistani president Asif Ali Zardari.
“Thus far, President Zardari has sent the right signals. He's indicated that he recognizes this is not just a threat to the United States but is a threat to Pakistan, as well.
“There was a bombing in Pakistan just yesterday that killed scores of people. And so you're seeing greater and greater terrorist activity inside Pakistan. I think this democratically elected government understands that threat, and I hope that in the coming months that we are going to be able to establish the kind of close, effective working relationship that makes both countries safer.”
-- He had much less diplomatic talk for Moscow, saying that it’s time “to reset U.S.-Russian relations.”
“They're increasingly assertive. And when it comes to Georgia and their threats against their neighboring countries, I think they have been acting in a way that is contrary to international norms. We want to cooperate with them where we can, and there are a whole host of areas particularly around nonproliferation of weapons and terrorism where we can cooperate, but we also have to send a clear message that they have to act in ways that are not bullying their neighbors.”
--He pointedly avoided weighing in on the news that Caroline Kennedy, daughter of JFK and an early supporter, has expressed interest in replacing Hillary Clinton in the Senate.
"Caroline Kennedy has become one of my dearest friends and is just a wonderful American, a wonderful person, but the last thing I want to do is get involved in New York politics. I've got enough trouble in terms of Illinois politics."
--And he began to outline a diverse array of cultural activities to be hosted by he and his wife, Michelle, in the White House, saying they would especially focus on the arts and sciences with a hope of having kids involved.
“We want to invite kids from local schools into the White House,” Obama said.
He also promised jazz, classical music and poetry at 1600 Pennsylvania Ave. so “once again we appreciate this incredible tapestry that's America.”