In a revision of previous data, the Commerce Department reported Friday that Gross Domestic Product -- the broadest measure of the economy – fell at an annualized rate of 6.2 percent in the 4th quarter of last year. That's the weakest quarterly showing since 1982.
Consumer spending, which accounts for more than two-thirds of all domestic economic activity, dropped by 4.3 percent in the 4th quarter -- its largest decline in 28 years.
Businesses slashed spending on equipment and software at an annualized pace of nearly 30 percent to post their worst showing in more than 50 years.
On Friday, the government announced plans to exchange up to $25 billion in emergency bailout money it provided Citigroup Inc. for up to a 36 percent equity stake in the financial giant. The deal represents the third rescue for the struggling bank in the past five months, and it increases taxpayer risk even as voter disapproval of the broader bailout program rises.
President Obama proposed his first federal budget Thursday complete with a whopping $1.75 trillion deficit. But before releasing the details, the President called on Americans to "keep the faith."
Lead 1 Address to Congress
President Barack Obama: "But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this:
We will rebuild, we will recover, and the United States of America will emerge stronger than before."
President Obama's first address to Congress signified what he calls a "day of reckoning" for the nation's economy. One week after signing a $787 billion stimulus plan, Obama urged fiscal restraint in federal spending and outlined the 2010 budget.
President Barack Obama: "My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we've inherited – a trillion dollar deficit, a financial crisis, and a costly recession. Given these realities, everyone in this chamber – Democrats and Republicans – will have to sacrifice some worthy priorities for which there are no dollars. And that includes me."
Obama highlighted three areas his administration would focus on in the coming months: energy, health care, and education. All sectors would receive massive federal funding and potential program overhauls.
President Barack Obama: "So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America."
Agricultural programs received brief mention during the 50-minute speech but in a negative reference to subsidies and in a broader discussion of wasteful government spending.
President Barack Obama: "We have already identified two trillion dollars in savings over the next decade. In this budget, we will end education programs that don't work and end direct payments to large agribusinesses that don't need them."
Obama has previously supported lowering the cap on direct farm payments to $250,000 but details on any new cap proposals have not been released. Some farm groups, like the National Corn Growers Association, were unsure exactly what Obama's statement might entail.
Republicans responded to Obama with 37-year old first-term Louisiana Governor Bobby Jindal, who emphasized a cautious and constrained approach to federal spending.
Gov. Bobby Jindal, R-Louisiana: "Democratic leaders say their legislation will grow the economy. What it will do is grow the government, increase our taxes down the line, and saddle future generations with debt."