Monday, November 24, 2008

Obama unveils team for stimulus, jobs

As expected, president-elect names Geithner as his treasury secretary

CHICAGO - President-elect Barack Obama on Monday unveiled his economic team amid expectations that he would urge the next Congress to quickly pass a massive stimulus plan that would dwarf even his campaign proposals to salvage the country's financial wreckage.

"I've sought leaders who could offer both sound judgment and fresh thinking, both a depth of experience and a wealth of bold new ideas — and most of all, who share my fundamental belief that we cannot have a thriving Wall Street while Main Street suffers," Obama said at the start of a Chicago press conference. "That in this country, we rise and fall as one nation, as one people."

As expected, the president-elect named Timothy Geithner, the New York Federal Reserve president, as his treasury secretary. Wall Street stocks jumped on Friday when word of Geithner's appointment began to leak.

Geithner, 47, will team with Lawrence Summers, a treasury secretary under former President Bill Clinton and former Harvard University president, who will take over the National Economic Council.

Obama also named three others on his economic team:

Christina Romer as director of the Council of Economic Advisers. Romer is a U.C. Berkeley professor of economics, and co-director of the Program in Monetary Economics at the National Bureau of Economic Research.

Melody Barnes as director of the Domestic Policy Council. Co-director of the Agency Review Working Group for the Obama transition team, she also served as the senior domestic policy advisor to Obama during the campaign. Barnes previously worked at the Center for American Progress and as chief counsel to Senator Ted Kennedy.
Heather Higginbottom as deputy director of the Domestic Policy Council. She was Obama's policy director during the campaign and earlier served as Sen. John Kerry's legislative director.

Democratic officials also said Obama plans to name New Mexico Gov. Bill Richardson as commerce secretary, adding a prominent Hispanic and one-time Democratic presidential rival to his Cabinet. Richardson served as U.N. ambassador in the Clinton administration and later as energy secretary.

Obama was speaking against a backdrop of increasing calls for him to assert himself well before he takes office Jan. 20 in the midst of the most severe U.S. financial crisis in eight decades.

In the latest bailout, the U.S. government announced late Sunday it had agreed to shoulder hundreds of billions of dollars in possible losses at the banking giant Citigroup, and to put a fresh $20 billion into the stricken company.

Obama's team will confront an economic crisis that continues to deepen in spite of hundreds of billions of dollars in federal emergency spending in recent weeks.

"The stakes are high," said Julian Zelizer, professor of history and public affairs at Princeton University. "This is a really dangerous moment ... for the economy. It’s almost as if no one’s in control. Now people are looking to (Obama) to find out at least what’s going to happen in the next few months, if not the next few weeks."

Except for one short news conference, Obama has kept a low public profile since his November 4 victory over Republican John McCain, remaining in Chicago to pick his Cabinet but not formally announcing any of his choices.

Other members of Obama’s team are likely to include:

Peter Orszag, a former Clinton administration economic aide, as the White House budget director. Orszag has been director of the Congressional Budget Office since January 2007.

Jason Furman, Obama’s top economic policy coordinator during the presidential campaign, is likely to get a senior role, probably as the No. 2 official at the National Economic Council.

Tax cut/stimulus package

Top aides said Sunday that Obama wants Congress to use its large Democratic majority when it convenes Jan. 6 to prepare tax cuts for low- and middle-income earners as part of the massive government intervention designed to pull the country out of its frightening economic nosedive.

Some economists have endorsed spending up to $600 billion to revive the economy. Sen. Charles Schumer, a New York Democrat, and Clinton-era Labor Secretary Robert Reich, a member of Obama's economic advisory board, both suggested $500 billion to $700 billion.

Before winning the presidency Nov. 4, Obama had said he looked to create a $175 billion stimulus package. While the new plan will be significantly larger, it was expected to incorporate his campaign ideas for tax cuts and new jobs in energy technologies to lessen dependence on foreign oil and to reduce carbon emissions.

"I don't know what the number is going to be, but it's going to be a big number," Goolsbee said on Sunday. "It has to be. The point is to, kind of, get people back on track and startle the thing into submission."

Over the weekend, Obama directed his team to erect a plan to create 2.5 million new jobs by the end of 2010, and aides said his broader economic program was designed to quickly offer tax relief to lower- and middle-income earners.

No tax hike on wealthiest for now

Significantly the plan would not offer an immediate tax increase on wealthy taxpayers. During the campaign, Obama said he would raise taxes on people making more than $250,000.

"There won’t be any tax increases in the January package," said one Obama aide, who spoke on condition of anonymity because the details of the Obama package have not been fleshed out.

Obama could delay any tax increase to 2011, when current Bush administration tax cuts expire.

House Republican leader John Boehner of Ohio urged Obama to make that explicit. "Why wouldn’t we have the president-elect say, 'I am not going to raise taxes on any American in my first two years in office?'"

'Want to hit the ground running'

Obama senior adviser David Axelrod earlier unambiguously voiced Obama's overall expectations.

"Our hope is that the new Congress begins work on this as soon as they take office in early January, because we don't have time to waste here, " he said on Sunday. "We want to hit the ground running on January 20th."

Congress will have two weeks to hold hearings and write legislation between its return to Washington in early January and Obama's inauguration.

Rep. Steny Hoyer of Maryland, the second-ranking Democrat in the House of Representatives, acknowledged a readiness for quick action.

"We expect to have during the first couple of weeks of January a package for the president's consideration when he takes office."

Axelrod also warned executives of the U.S. auto industry to draw up plans to retool and restructure their industry if they want the billions of dollars they are seeking from Congress. Otherwise, Axelrod said, "there is very little taxpayers can do to help them."

Fighting terrorism

Obama also delved into one of the most pressing foreign policy issues facing his presidency, calling Afghan President Hamid Karzai by telephone and telling him that fighting terrorism there and in the region would be a top priority, Karzai's office said on Sunday.

The Saturday conversation between Obama and Karzai was the first reported contact between the two since the Nov. 4 election. The United States has some 32,000 American troops in Afghanistan, a number that will be increased by thousands next year.

Fighting terrorism and the insurgency "in Afghanistan, the region and the world is a top priority," Karzai's office quoted Obama as saying during the conversation.


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