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Obama calls for 'dramatic action'

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  • NEW: Obama: "A bad situation could become dramatically worse"
  • Obama warns that delay on aid package would have major consequences
  • Obama addressing critics who oppose such a massive spending plan
  • Republicans have said they are interested in seeing significant tax cuts in plan
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(CNN) -- President-elect Barack Obama on Thursday said Congress must take "dramatic action" on his economic aid package as soon as possible, warning that a failure to do so would have devastating long-term consequences for the nation.

Barack Obama says failure to act quickly on his economic plan would have devastating consequences.

Barack Obama says failure to act quickly on his economic plan would have devastating consequences.

"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits," he said.

"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. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," he said.

Obama laid the groundwork for urgent action on his "American Recovery and Reinvestment Plan," a plan he says will save or create more than 3 million jobs and invest in health care, energy and education, among other priorities.

Obama said his plan will immediately help jumpstart the economy by doubling the production of alternative energy within three years, improving the efficiency of federal buildings and homes, computerizing medical records, equipping schools with 21st century classrooms, expanding broadband across the country, and investing in science and new technologies. Video Watch Obama call for action »

The president-elect said the cost of his plan would be "considerable" and would "certainly add to the budget deficit in the short term." He did not put a price tag on the stimulus package, but observers have estimated it would cost about $800 billion. iReport.com: What programs can we give up, and how should we conserve money?

"Government at every level will have to tighten its belt, but we'll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care," he said.

The plan is expected to include tax cuts for businesses and middle-class workers, money to help states dealing with their own financial crises, and funds to build infrastructure. The earliest the stimulus plan could be signed into law would be mid-February.

As Obama tried to rally support for his massive economic package, he stayed away from specifics on how the plan would be implemented.

One of the reasons the Obama team hasn't gotten into too much specificity yet is because they do not want to dictate to the new Congress exactly what to do, transition officials said.

Also, if they put out too many details, they know that people on Capitol Hill could start pushing back and wanting to make changes, CNN's Ed Henry said.

"Critics -- once you put out a detailed document -- will start firing away at controversial provisions that might start going down, and it will look publicly as if the president-elect is losing some political clout if he has to start changing the plan dramatically," Henry said.

"I think what they are trying to do ... is to lay out broad principles here and let Congress sort of do the heavy lifting on the details of it," he said.

Obama on Thursday addressed critics who oppose such a massive spending plan by the federal government.

"It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe," he said.

Obama contrasted his plan with other attempts to strengthen the economy, saying that the difference is his plan "won't just throw money at our problems -- we'll invest in what works."

"I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning," he said.

The president-elect said that the economic crisis was the consequence of an "era of profound irresponsibility" in which "too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability."

He also pointed the finger of blame at politicians who "spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government."

Despite the dire situation that he described, Obama expressed hope that the country would recover.

"We are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again," he said.

Obama has promised that his administration will embrace budget reform. He vowed on Tuesday to "bring a long-overdue sense of responsibility and accountability to Washington" and warned that members of Congress won't be allowed to slip earmarks into the economic recovery package.

The president-elect met with key Democratic and Republican congressional members Monday, and leaders from both sides of the aisle were optimistic after the meeting.

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Republicans, however, cautioned that they are interested in seeing significant tax cuts in the plan and expect to provide significant input into the process as well.

"This potentially $1 trillion bill would be one of the largest spending bills in U.S. history. It would increase the deficit by half a trillion dollars overnight and deepen an already enormous national debt," Senate Minority Leader Mitch McConnell, R-Kentucky, said. "Before we all agree to it, the American people need to see the details.

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