Obama addresses Congress, nation tonight

Speaking to a nation shaken by joblessness and a collapsing stock market, President Obama on Tuesday sought to rally the public with optimism and ambition, saying the country would overcome its economic challenges by embracing a new era of American ingenuity.

“The weight of this crisis will not determine the destiny of this nation,” Obama said. “The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.”

In his debut address to a joint session of Congress, which was broadcast to the nation in prime time, the president argued that the country would not overcome its economic problems without also making long-term changes in healthcare and energy policy that he promoted during his presidential campaign. Those include expanded access to health insurance and efforts to fight global warming, which critics say would place new costs on a battered economy.

The president also hinted at a massive bank bailout in the works, one costing “probably more than we’ve already set aside,” as well as some form of government aid for the domestic automobile industry that he said would not come “without cost.”

In the wake of those hard messages, Obama offered assurances that his administration was going “line by line” through the federal budget in search of wasteful and ineffective programs.

Rather than promoting his agenda point by point, the president asked Americans to be open to proposals he will lay out in the coming days, and to make a commitment to “come together and lift this nation from the depths of this crisis.”

The tableau in the House chambers was a striking one, even for a nation growing acclimated to an African American president. Obama stood at the podium in a dark suit and bright-red tie, with Nancy Pelosi, the first female speaker of the House, poised behind him holding the gavel. Vice President Joe Biden completed the image of racial and gender diversity, which was televised around the world.

In another sign of the changed environment, Obama spoke almost entirely about the economy and domestic priorities, with only glancing references to challenges overseas -- a significant departure from the George W. Bush years.

The speech was Obama’s first to a formal assembly of Congress. Although widely regarded as his inaugural State of the Union address, presidents in their first year of office generally do not call it that.

Delivering the Republican response, Gov. Bobby Jindal of Louisiana echoed Obama’s homage to American ingenuity but disputed the president’s solutions to the economic turmoil.

“Democratic leaders say their legislation will grow the economy,” Jindal said in a televised address. “What it will do is grow the government, increase our taxes down the line, and saddle future generations with debt. . . . It’s no way to strengthen our economy, create jobs or build a prosperous future for our children.”

Speaking on the eve of Lent, liturgical Christianity’s 40-day period of self-denial, Obama called for a break from the excesses of the past and for a period of discipline and restraint.

“We have lived through an era where, too often, short-term gains were prized over long-term prosperity. . . . Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway,” the president said.

But Obama also foreshadowed the massive spending in the near future, nodding to bailouts of the banking and auto industries, though not offering details about them.

He said the nation could not “walk away” from the automobile industry, but gave no clues to how the government would guide the restructuring of the troubled automakers.

As he prepares for what will probably be an even more expensive and unpopular bailout of banks and financial service companies, Obama was careful to condemn the practices that brought the industry to its current state of crisis.

The president said he intended to hold banks “fully accountable” for the assistance they receive, and that they “will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer.”

But in his first nod to the size of the bank bailout under consideration, Obama said the plan he was crafting would “require significant resources from the federal government -- and yes, probably more than we’ve already set aside.”

The cost of action will be substantial, he said, but the “cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.”

The president cast his proposals to help the economy as short-term expenditures. In the longer term, he promised, the nation would keep reins on its spending.

He said he would cut the deficit in half by the end of his first term, and pledged that his budgets would be “honest” rather than relying on gimmicks for masking deficits or overestimating revenue.

He also promised to follow the principle of identifying budget cuts or revenue sources for all new programs, an idea known as “pay as you go” among budget hawks.

At the same time, Obama signaled that the economic crisis would not force him to back off the agenda he laid out during his presidential campaign. He laid the groundwork for some of his key proposals, including environmental initiatives and healthcare changes, by making the case that solving those problems was interlinked with the cause of economic recovery.

Obama renewed his call for a “cap-and-trade” system to combat global warming, which would set limits on greenhouse gas emissions and force companies that exceed them to buy permits. Proponents call the system a key step to curbing climate change. Critics say it would raise energy prices and hamstring the economy.

The issue promises to spark a heated debate in Congress, and its prospects are uncertain.

“I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America,” Obama said.

Turning to healthcare, the president promised that his budget later this week would include a “historic commitment to comprehensive healthcare reform, a down payment on the principle that we must have quality, affordable healthcare for every American.”

Still, he did not say how the spending plan would begin reducing the ranks of the more than 47 million Americans without coverage, a potentially contentious process that is sure to stoke an ideological battle over government’s role in providing healthcare.

Nor did he indicate how his administration would begin wringing savings from the gargantuan healthcare system, a process likely to be equally difficult.

Obama said his healthcare plan would invest in electronic health records and would include a new effort to cure cancer -- a disease, he noted, that has touched his own family. Obama’s mother died of cancer when he was a young adult.

Obama’s healthcare proposals are expected to face resistance. Republicans on Capitol Hill have already chafed at the administration’s early moves to expand federally funded health coverage for children and to subsidize private insurance for unemployed Americans. And GOP lawmakers are becoming increasingly wary of the new president’s healthcare plans, which are being developed without their involvement.

Obama also introduced some new ideas about education, in part by setting a new goal: that by 2020, the U.S. will once again have the highest proportion of college graduates in the world.

In brief comments on foreign affairs, Obama said he would work more closely with allies on a range of issues including terrorism, cyber-attacks and poverty. “For we know that America cannot meet the threats of this century alone, but the world cannot meet them without America,” Obama said.

With an implicit comparison to the Bush administration, but without citing any adversary by name, he declared that “a new era of engagement has begun.”

Gathered in the House balcony with First Lady Michelle Obama, an array of honorees watched the speech. They included public school students, a police officer, a firefighter, veterans and Vermont Gov. Jim Douglas, a Republican who supports the president’s economic stimulus package.

Obama’s words drew several decidedly partisan responses, as when Republicans cheered heartily for his promise not to pass on to another generation “a debt they cannot pay.”

The president immediately followed up with a reminder that it was a “deficit we inherited,” drawing loud cheers from Democrats. Obama flashed them a broad smile.

But Jindal struck a different tone when he critiqued the general themes of the president’s maiden address.

“To solve our current problems, Washington must lead,” the governor said. “But the way to lead is not to raise taxes and put more money and power in hands of Washington politicians.”

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cparsons@tribune.com

peter.nicholas@latimes.com