Congress must act boldly, Obama says

WASHINGTON - President-elect Barack Obama warned Thursday that the nation is sliding into the deepest economic crisis since World War II and urged Congress to "act boldly and act now" to pass a stimulus package or risk an entire generation of Americans losing any hope of prosperity.

In his first major speech since Election Day, Obama participated in an early version of a presidential ritual: preparing the country for an eventual economic recovery by painting an especially grim picture of the nation's fiscal standing at the start.

"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied," he told an audience at George Mason University in Fairfax, Va. "And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."

Obama's call for urgency, however, was met by unexpected hesitation from his own party, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.

Senate Democrats complained Thursday that major components of Obama's plan were not bold enough and urged more focus on creating jobs and rebuilding the nation's energy infrastructure rather than cutting taxes.

It would be difficult to sugarcoat the current economic dangers on the horizon, and Obama made no attempt to do so, citing a 28-year low in manufacturing, an unemployment rate that could reach double digits and 2 million lost jobs.

But the president-elect also offered some hopeful words for a weary nation. "Our problems are rooted in past mistakes, not our capacity for future greatness," Obama said.

But his comments were punctuated by gloomy reports. The nation's retailers said Thursday that the holiday shopping season was even worse than anticipated. And economists braced for another spike in job losses when monthly employment numbers are released today.

Retrofitting America

Thursday's speech marked the start of the formal campaign to move through Congress a stimulus package that Obama portrayed as an effort to "retrofit America" -- rebuilding infrastructure while also investing in alternative energy, modernizing schools and extending broadband Internet service to rural areas.

While some details remain vague -- including the total cost of the plan, which could reach $800 billion -- Obama offered some goals that he hopes to achieve: a doubling in the production of alternative energy, modernizing 75 percent of federal buildings, computerizing health records in five years, providing an immediate tax cut of up to $1,000 for Americans and providing a $3,000 tax break for job creation.

The proposed $3,000 tax break drew particular criticism in a private meeting of the Senate Finance Committee.

Sen. Kent Conrad, D-N.D., was critical of a proposed tax break for workers and their families. "Twenty bucks a week. How much of a lift is that going to give?" he said.

Nor did he sound positive about a proposed tax break for businesses to create jobs.

"If I'm a business person, it's unlikely if you give me a several thousand dollar credit that I'm going to hire people if I can't sell the products they're producing," he said.

Conrad and others said Obama's blueprint included about $10 billion in tax incentives related to energy, out of about $300 billion overall -- a slice they said was too small.

David Axelrod, Obama's senior adviser, said the emerging pockets of criticism were not concerning.

"Obviously, it's a big answer to a big problem and there are a lot of component parts to it," Axelrod said after meeting with balky Senate Democrats. "These folks are not potted plants. They're elected officials, and they're doing their jobs."

He added that "it's a collective process and we're willing to listen to people's ideas."

A tricky timeline

And while some Democrats said the plan wasn't bold enough, Republicans warned against rushing to pass excessive new spending.

"[We] don't want to make big mistakes that exacerbate the -- the problem we already have, which is a dramatic, eye-popping deficit," Senate Republican leader Mitch McConnell of Kentucky said.

Obama acknowledged the staggering cost of his proposals. To assuage concerns, he pledged "an unprecedented effort to eliminate unwise" spending.

House Speaker Nancy Pelosi, D-Calif., said she would cancel next month's Presidents' Day vacation if necessary to get the legislation passed. "We are not going home without an economic recovery package," she said.

Dean Baker, co-director of the Center for Economic and Policy Research said the economy's downward momentum will continue to increase daily. "Whatever day they pass it, it is going to take some time to get the money out of the door.

"Most economists," he said, "would like to have been spending money now."

The Associated Press and New York Times contributed to this report.