CHICAGO — President-elect Barack Obama worked to send a message of confidence to jittery markets and consumers Monday, unveiling an economic team tested in crises past and present and promising a massive stimulus package big enough to send a "jolt" through the economy.
Obama vowed quick action, ordering his team to produce a plan in coming weeks. He said he hoped they could send the blueprint to the new Congress in January, even before he's sworn in.
The goals of that plan, Obama said at a news conference, include stabilizing the financial system while "addressing our growing foreclosure crisis, helping our struggling auto industry and creating and saving 2.5 million jobs."
The jobs he wants to create, Obama said, would include "rebuilding our crumbling roads and bridges, modernizing our schools and creating the clean energy infrastructure of the 21st century."
He said he'd offer more details about his future budget Tuesday.
Stock markets reacted favorably. The Dow Jones Industrial Average rose 396.97 points, or 4.98 percent, to close at 8,443.39. The tech-heavy Nasdaq Composite Index rose even more, up 87.67 points, or 6.3 percent, to close at 1472.22. The S&P 500 index rose 6.5 percent, or 51.78 points, to close at 851.81.
In an unusual sign of cooperation during a change at the White House not just of presidents but also of political parties, Obama said he'd told his economic team to work with the outgoing Bush administration, which he'd criticized repeatedly as a candidate.
He said he'd spoken with President George W. Bush earlier Monday, as well as with Federal Reserve Chairman Ben Bernanke, and would honor all public commitments that Bush made to fight the economic crisis.
That's a sharp change from a similar and oft-cited precedent in 1932, when Democrat Franklin Roosevelt refused to work with outgoing Republican President Herbert Hoover, preferring a clean break as the best sign of a fresh start.
"With our economy in distress, we cannot hesitate and we cannot delay," Obama said as he emerged from two weeks of near seclusion. "Our families can't afford to keep on waiting and hoping for a solution."
The president-elect, who's announced his White House staff picks via written statements, appeared in person to unveil his first Cabinet appointment and his economic team:
- Timothy Geithner as the secretary of the treasury. As the president of the New York Federal Reserve Bank, Geithner already is deeply involved in the federal rescue of Wall Street and will spearhead Obama's plan for the overall economy.
- Lawrence Summers as the director of the National Economic Council. A former secretary of the treasury under Bill Clinton, Summers helped manage financial crises in Mexico, Asia and Russia. He'll coordinate Obama's administration-wide economic policies from inside the White House, with an eye on making sure that the poor and the middle class do better.
- Christina Romer as the director of the Council of Economic Advisors. An economics professor at the University of California-Berkeley, Romer also has worked with the National Bureau of Economic Research and the Federal Reserve.
- Melody Barnes as the director of the Domestic Policy Council. Barnes is a former aide to Sen. Edward Kennedy, D-Mass., and a vice president of the Center for American Progress, a liberal research center in Washington headed by Obama transition co-chairman John Podesta. She'll help develop a health-care overhaul — providing coverage to the uninsured and reducing costs for those with insurance — an issue that Obama calls key to economic recovery.
"We know this won't be easy, and it won't happen overnight. We'll need to bring together the best minds in America to guide us, and that is what I've sought to do in assembling my economic team," Obama said, as the four stood behind him.
In dispatching them to write a new plan for rescuing the economy, he signaled a willingness to be pragmatic, even about some of his own campaign promises.
He's likely to propose a stimulus plan with a price tag that will dwarf the $175 billion he proposed as a candidate. Though he refused to say Monday how much he'd propose, congressional Democrats say it could cost $500 billion to $700 billion.
He said that "we'll have to scour our federal budget line by line, and make meaningful cuts and sacrifices." He warned, however, that next year's federal budget deficit could be jarring, given his new proposals atop the extraordinary measures already approved, such as the $700 billion bailout of Wall Street.
"It's going to be costly," he said. "Even if we did nothing further for the remainder of this year . . . we're going to see a substantial deficit next year, bigger than we've seen in a very long time."
Obama stressed that there's a rare consensus among conservative and liberal economists that a massive federal stimulus is necessary to revive the economy even if it swells the federal budget deficit temporarily.
He also said he was open to delaying his proposed tax increase on those who make more than $250,000 a year but that they eventually would have to do more to help pay the bills.
He said he'd wait to hear whether his economic team recommended repealing the Bush tax cuts next year for top earners or keeping them intact and letting them expire as scheduled at the end of 2010.
The president-elect also discussed aid to the ailing American auto industry. He said it was essential but that Washington couldn't simply write a "blank check" for the Big Three Detroit automakers.
He said Congress was correct in telling Detroit executives last week to draft a plan on how taxpayers' money would be used to retool their companies to make them competitive and efficient. He said he was "surprised that they did not have a better-thought-out proposal when they arrived in Congress."
Rep. John Boehner of Ohio, the Republican leader in the House of Representatives, urged Obama to craft an agenda that includes eliminating the capital gains tax, overhauling energy, stopping unnecessary lawsuits and cutting taxes.
That suggested areas of possible bipartisan negotiation and agreement, particularly on energy and tax reductions. Obama, too, proposed broad tax cuts and changes in energy use and production as keys to supporting long-term economic growth.
(Lightman reported from Washington.)
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