'Day of reckoning has arrived,' Obama tells Congress

After an era of avoiding challenges and focusing on quick profit rather than a healthy market, the "day of reckoning" has arrived in the United States, President Barack Obama said on Tuesday evening.

"We have lived through an era where too often, short-term gains were prized over long-term prosperity," Obama said in his speech before a joint session of the Senate and the House of Representatives.

"We failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future.

"Critical debates and difficult decisions were put off for some other time on some other day."

Obamasaid much of the U.S.'s $1 trillion-plus deficit was "inherited" from the previous administration and it forced him to pursue a costly stimulus package.

'Time to take charge'

"I say this not to lay blame or look backwards but because it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament," Obama said.

The president has previously stated his goal is to cut the deficit in half by the end of his term in 2013.

"Theday of reckoning has arrived," he said.

The U.S. must "act boldly and wisely" to revive its economy and to build a new foundation for a lasting prosperity, he said.

Though not a State of the Union address, the speech was Obama's first chance to update the country on thenew administration's progress, as well as to make his case for more action on health care, energy, education and the budget deficit.

The address, which earned 63 rounds of applause, focused on the economy, with Obama acknowledging that it remains the primary concern for most Americans.

Obama continued to sell the economic recovery package to Americans and to lay out his administration's plans.

Obama's administration says the stimulus package should save or create about 3.5 million jobs, many of which will be in the private sector, on construction projects. Many Americans will also receive a tax cut, a tax credit for college education and extended unemployment benefits for those who lost their jobs to the recession.

Obama said the package was necessary but acknowledged some members of Congress and American citizens are still skeptical. Still, he warned that more money will likely be needed to pull the U.S. out of recession.

"The recovery plan we passed is the first step in getting our economy back on track," he said. "But it is just the first step because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system."

Restart lending

Lending must be restarted because "the flow of credit is the lifeblood of our economy," said the president. Without lending, people can't afford to buy homes and businesses are forced to make layoffs, he said.

A new lending fund is being created to help provide auto loans, college loans, and small business loans, Obama said.

Obama again stressed that plans for economic recovery are focused on helping people, not helping banks. Banks will be held fully accountable for the assistance they receive, he said.

"This time, CEOs won't be able to use taxpayer money to pad their paycheques or buy fancy drapes or disappear on a private jet. Those days are over," the president said.

Congress must move quickly on legislation to reform theoutdated U.S. regulatory system to ensure that an economic crisis of "this magnitude never happens again," Obama said.

Though Obama was frank about the grim state of the U.S. economy, he tried to offer Americans hope for the future.

Obama said his administration will focus on jumpstarting job creation, restarting lending, and investing in energy, health care and education.

U.S. must compete in global economy

Ensuring the country's abilityto compete in the rest of the world is also crucial to itsrecovery, he said.

"The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren't preparing our children and the mountain of debt they stand to inherit. That is our responsibility," he said.

The country that harnesses the power of clean, renewable energy will lead the 21st century, he said.

"We invented solar technology but we've fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea," he said.

"It is time for America to lead again," he said, and the government will invest in research to develop clean energy technologies while placing a cap on carbon pollution.

Health-care reform can also no longer be put on hold, said the president, and investment will be made in electronic health records, research and preventive care.

Pursue higher education, president says

A good education is also a prerequisite in a global economy, he said, and the Obama administration will work to ensure a complete and comprehensive education for every child.

"We know the countries that out-teach us today will out-compete us tomorrow," he said.

The president asked that all Americans commit to taking at least one year of higher education or career training.

"Every American will need to get more than a high school diploma and dropping out of high school is no longer an option," he said. "It's not just quitting on yourself, it's quitting on your country and this country needs and values the talents of every American."

The government's goal is to have the U.S. have the highest proportion of college graduates in the world by 2020.

'Vision for America'

Obama told Americans that following the economic plan will allow their country to emerge from the recession "stronger than ever."

While public support for Obama has remained strong, Wall Street has been skeptical of his economic remedies.

U.S. stocks plummeted on Monday, taking the Dow Jones industrial average to its lowest since October 1997. They rebounded Tuesday after Federal Reserve chairman Ben Bernanke said the recession might end this year.

Obama's televised address came two days before he is to deliver a budgetto Congress.

The budget document is a "vision for America" and a "blueprint" for the future, though it does not address every issue currently facing the U.S., Obama said.

The budget will look ahead 10 years and will account for spending that has not previously been highlighted including the costs of the wars in Iraq and Afghanistan, Obama said.

"For seven years, we have been a nation at war. No longer will we hide its price."

Obama said he will soon announce his administration's policies on both wars, including how to end the war in Iraq, along witha comprehensive strategy for Afghanistan and combating terrorism.