Updated at 5:22 pm EDT
The U.S. has recovered from “a perfect storm” of economic catastrophies, President Barack Obama said today. While “a new foundation” has been laid, he said, much remains to be done about the economic disparities of “a winner-take-all economy.”
The president, speaking on the fifth anniversary of the collapse of Lehman Brothers Holdings Inc., was highlighting economic gains made since that threshold event.
And, as Congress returns this week to face the renewal of federal spending authority at month’s end, the president used this forum to sharply criticize congressional Republicans intent on more government spending cuts.
It was five years ago this week, he said, that an economy already in recession was thrust into a “tailspin.”
“By the time I took office, the economy was shrinking by an annual rate of more than eight percent,” said the president who took office in January 2009.
The Lehman Brothers bankruptcy filing on Sept. 15, 2008, helped trigger a global financial crisis and deepened an economic recession that became the worst since the Great Depression. It was followed by a plunge in the U.S. stock market and a $182 billion government bailout of the insurer American International Group Inc.
The Standard & Poor’s 500 Index plunged 46 percent from the last trading day before the Lehman Brothers bankruptcy to a closing low of 676.53 on March 9, 2009. The unemployment rate surged to 10 percent as 8.7 million jobs were lost between January 2008 and February 2010.
The recovery is far from complete, though the nation’s jobless rate stood at 7.3 percent in August and the stock market scored record highs this year as housing prices have started to rebound.
Citing the government actions taken, including “saving the auto industry,” Obama also spoke of “new protections” in the financial markets and tax cuts “locked in” for most Americans.
The financial system is “safer,” he said in an address at the Eisenhower Executive Office Building adjacent to the White House.
“We’ve cleared away the rubble from the financial crisis, and we’ve begun to lay a new foundation,” he said. “We should note how far we’ve come from where we were five years ago.”
Still, he said, “we are not yet where we need to be.”
Widening economic disparity still dominates “a winner-take-all economy,” he said. “As Congress begins another budget debate, that’s what Congress should be focused on — how do we grow the economy faster… What happens here in Washington makes a difference.”
“The problem is, at the moment, Republicans don’t seem to be focused on how to grow the economy,” he said. “I’m still hoping that a light bulb goes off here.”
Instead, he said, Republicans are focused on even deeper cuts in government spending. After the last five years, he said, cutting spending “is the height of irresponsibility.” And Republicans still are arguing over repealing the health care law he won in 2010, he said — suggesting that debate was settled in his 2012 reelection, “and the candidate who was proposing that lost.”
Congress must pass a budget “without drama,” he said, that places the nation on a firm course of recovery.
House Speaker John Boehner, an Ohio Republican, issued a response later:
“It’s a shame that the president could not manage to rise above partisanship today. Instead, he should be working in a bipartisan way to address America’s spending problem — the way presidents of both parties have done before. He should work with us to delay his health care law for everyone – just as he’s done for big businesses – expand energy production, simplify our tax code, and more. The president is right that we’re ‘not yet where we need to be,’ which is why Republicans will stay focused on growing our economy and expanding opportunity for all Americans.”