President Barack Obama said Tuesday he saw little hope of near-term improvement in the U.S. economy after a staggering drop in gross domestic product in the final three months of last year."The economy's performance in the last quarter of 2008 was the worst in over 25 years. And frankly the first quarter of this year holds out little promise for better returns," he said in a speech at the Department of Transportation.
Obama said one of the main challenges facing his government was to unlock frozen credit markets and that the launch Tuesday of a new lending facility by the Federal Reserve and the Treasury was key to that effort.The consumer lending initiative will generate up to $1 trillion in lending.
"This will help unlock our credit markets, which is absolutely essential for economic recovery," Obama said, speaking two weeks after signing a $787 billion stimulus package aimed at jolting the economy out of recession.
The economy suffered its deepest contraction since early 1982 in the fourth quarter of last year, plummeting at a 6.2 percent annual rate as consumers pulled back sharply on their spending.
The grim data has contributed to the huge sell-off in the U.S. stock market, which hit a 12-year low this week.
Meanwhile, Obama's budget chief is on Capitol Hill defending the president's $3.6 trillion budget for next year as an honest accounting of the government's bleak fiscal woes.
Budget director Peter Orszag says Obama inherited a whopping deficit and an economy in crisis but that shouldn't block investments in education and an overhaul of the U.S. health care system to help the uninsured.
Orszag defended Obama's plan to raise taxes on people making $250,000 or more, saying the tax policies of President Bush transferred too much wealth to the rich.
Obama's budget is a nonbinding plan that will be reviewed extensively by Congress. It's an ambitious rewrite of the nation's priorities on health care, taxes and global warming, but faces big challenges because of its numerous controversial proposals.
The budget plan is coming under fire on Capitol Hill from a senior Republican, who is calling it the biggest expansion of government since the New Deal.
Wisconsin Republican Paul Ryan told Obama's budget chief Peter Orszag at a House Budget panel hearing that administration claims of deficit-cutting are mostly bogus since the deficit would fall anyway as the war in Iraq winds down.
Ryan also warned Tuesday that tax increases on small businesses earning more than $250,000 a year would stunt a possible recovery and that the plan would double the national debt in eight years.
Ryan got first licks at the Obama plan since he's the top Republican on the panel. But Obama's budget also faces a difficult path through Congress because of its numerous controversial proposals on health care, taxes and global warming.
Copyright 2009 Reuters. Click for restrictions.
"This will help unlock our credit markets, which is absolutely essential for economic recovery," Obama said, speaking two weeks after signing a $787 billion stimulus package aimed at jolting the economy out of recession.
The economy suffered its deepest contraction since early 1982 in the fourth quarter of last year, plummeting at a 6.2 percent annual rate as consumers pulled back sharply on their spending.
The grim data has contributed to the huge sell-off in the U.S. stock market, which hit a 12-year low this week.
Meanwhile, Obama's budget chief is on Capitol Hill defending the president's $3.6 trillion budget for next year as an honest accounting of the government's bleak fiscal woes.
Budget director Peter Orszag says Obama inherited a whopping deficit and an economy in crisis but that shouldn't block investments in education and an overhaul of the U.S. health care system to help the uninsured.
Orszag defended Obama's plan to raise taxes on people making $250,000 or more, saying the tax policies of President Bush transferred too much wealth to the rich.
Obama's budget is a nonbinding plan that will be reviewed extensively by Congress. It's an ambitious rewrite of the nation's priorities on health care, taxes and global warming, but faces big challenges because of its numerous controversial proposals.
The budget plan is coming under fire on Capitol Hill from a senior Republican, who is calling it the biggest expansion of government since the New Deal.
Wisconsin Republican Paul Ryan told Obama's budget chief Peter Orszag at a House Budget panel hearing that administration claims of deficit-cutting are mostly bogus since the deficit would fall anyway as the war in Iraq winds down.
Ryan also warned Tuesday that tax increases on small businesses earning more than $250,000 a year would stunt a possible recovery and that the plan would double the national debt in eight years.
Ryan got first licks at the Obama plan since he's the top Republican on the panel. But Obama's budget also faces a difficult path through Congress because of its numerous controversial proposals on health care, taxes and global warming.
Copyright 2009 Reuters. Click for restrictions.
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