President Obama presented a serious assessment of the state of the US economy in his prime time news conference Tuesday evening, but he insisted his administration has a strategy in place to "attack this crisis on all fronts." The President said: "It’s a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long-term. And we are beginning to see signs of progress."

"It took many years and many failures to lead us here. And it will take many months and many different solutions to lead us out. There are no quick fixes, and there are no silver bullets,"he said.

"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, when each of us looks beyond our own short-term interest to the wider set of obligations we have towards each other, that's when we succeed," he said.

Obama defended his budget, which has been criticised for the planned deficit of $1.75 trillion in the fiscal year 2009/2010, which begins on October 1st, saying the plan he proposed is "inseparable" from the overall strategy for economic recovery.

"We've got to make some tough budgetary choices," the President said in his second prime time news conference. "What we can't do, though, is sacrifice long-term growth, investments that are critical to the future, and that's why my budget focuses on health care, energy, education, the kinds of things that can build a foundation for long-term economic growth, as opposed to the fleeting prosperity that we've seen over the last several years."

Obama rejected claims by critics on the range of planned investments, saying, "We haven't seen an alternative budget out of them." He also reiterated his pledge to cut the deficit in half over the next five years.

Asked whether he would sign a budget that doesn't include a middle-class tax cut, Obama said he has "emphasised repeatedly" what his expectations are.

"I haven't seen yet what provisions are in there," Obama said. "The bottom line is that I want to see health care, energy, education and serious efforts to reduce our budget deficit. And there are going to be details that still need to be worked out."

The news conference follows a week dominated by public outrage over millions of dollars in bonuses awarded to executives at the bailed-out insurance giant  American International Group (AIG), which has received billions in federal assistance.

On Monday, Wall Street gave the thumbs up to a plan to quarantine toxic assets held by banks and the administration is expected to outline its plan to overhaul the financial regulatory system on Thursday.

Obama said he supports a proposal made on Tuesday by Treasury Secretary Tim Geithner to gain new powers to seize financial institutions whose failure would pose serious risks to the US financial system.

"Keep in mind that it is precisely because of the lack of this authority that the AIG situation has gotten worse," Obama said.

On a question on sacrifices, and in “the new era of responsibility,” why hasn’t the administration asked Americans to sacrifice? “With respect to the American people, I think folks are sacrificing left and right,” he said. “I think that across the board people are making adjustments large and small.” The tough choices have to come from Washington, and that’s why the budget is about energy, health care, and education to build long-term economic growth. “What I’m looking to the American people to do is do what they’ve always done” and work hard and take care of their families and help their communities.

Asked if race has affected the way he has been perceived in any policy debates since taking office, Obama said,"The last 64 days has been dominated by me trying to figure out how we're going to fix the economy, and that affects black, brown and white."

"Obviously, at the inauguration, I think that there was justifiable pride on the part of the country that we had taken a step to move us beyond some of the searing legacies of racial discrimination in this country, but that lasted about a day."

Right now, he said, the American people are judging him as they should: "Are we taking the steps to improve liquidity in the financial markets, create jobs, get businesses to reopen, keep America safe? And that's what I've been spending my time thinking about."

There were no questions specifically about the Iraq War, which entered its sixth year last week. Osama bin Laden and terrorism also were not mentioned.