March 25, 2009 at 10:37 am

'We'll recover,' Obama promises

President asks for help passing $3.6T budget, which critics say will lead to bigger deficits.

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WASHINGTON -- President Barack Obama on Tuesday night sought to reassure a nervous nation in the midst of an economic upheaval that better times are ahead.

"We are beginning to see signs of progress," the president said in opening remarks at his second prime-time news conference.

"We'll recover from this recession. But it will take time. It will take patience. And it will take an understanding that when we all work together ... that's when we succeed," Obama said.

While acknowledging "no quick fixes," Obama pointed to several hopeful signs:

The $787 billion economic recovery plan has "already saved the jobs of teachers and police officers" and is creating road-construction jobs. Homes are beginning to sell again and home prices are stabilizing, he said. And a new program to spur more affordable auto loans, student loans and small-business loans has "already securitized more of this lending in the last week than in the last four months combined."

The economy and Obama's budget dominated the question-and-answer session. Noticeably absent was a focus on the nation's wars in Iraq and Afghanistan, or the war on terrorism, that was the hallmark of the rare news conferences by Obama's predecessor, President George W. Bush.

Lasting 55 minutes, Obama's news conference came at a pivotal, early moment in Obama's young presidency. Treasury Secretary Timothy Geithner is churning out near-daily proposals to solve the nation's economic crisis, the administration is struggling with public and congressional outrage over bonuses paid to executives of bailed-out AIG and Obama departs next week for his first European trip as commander in chief, with the global economy a major focus.

The president appealed directly to the public to help him with tough political battles ahead, especially a looming showdown with Congress on his $3.6 trillion budget plan for fiscal year 2010, a plan that critics say will lead to bigger deficits. Democrats in Congress are readying budget proposals that will largely determine how much of his first-term agenda passes.

Turning to foreign issues, Obama was asked how realistic peace is in the Middle East.

"We don't yet know what the Israeli government is going to look like," he said. "And we don't yet know what the future shape of Palestinian leadership is going to be comprised of. What we do know is that the status quo is unsustainable. That it is critical to advance a two-state solution, where Israelis and Palestinians can live side by side, in their own states with peace and security."

Obama said that assigning George Mitchell as special envoy for the challenge, "we've signaled is that we're going to be serious from day one."

One of the lighter moments of the evening came when Obama was asked how race has come up in his early days as the nation's first African-American president.

Obama drew some laughter when he said, "Obviously at the inauguration, I think there was justifiable pride on the part of the country that we had taken a step to move us beyond some of the searing legacy of racial discrimination in this country. But that lasted about a day."

Obama said the public is judging him "exactly the way I should be judged," which is over how he's responding to the financial crisis.

Part of his response, he said, is a budget that would help to avert a future economic crisis similar to the current one through long-term investments in renewable sources of energy and schools and by bringing down health care costs.

"The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this 10 or 20 years from now," he said.

"We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world."

Obama also renewed his vow to cut the deficit in half by the end of his first term.

Today, Obama is heading to Capitol Hill to lobby Senate Democrats for his spending blueprint.

Senate GOP leader Mitch McConnell criticized the proposed budget as an over-spending, over-taxing disaster. A Congressional Budget Office analysis released Friday estimates Obama's budget would generate deficits totaling $9.3 trillion over the next decade

"If these plans are carried out, we run the risk of looking like a Third World country," said McConnell, R-Ky.

But Obama shot down his critics. "This is a big ocean liner. It's not a speedboat. It doesn't turn around immediately," he said.

The Associated Press contributed to this report. You can reach Deb Price at dprice@detnews.com">dprice@detnews.com or (202) 662-8736.