Obama names econ team, sees 'historic' crisis

US President-elect Barack Obama announce
President-elect Barack Obama announces New York Federal Reserve Bank president Timothy Geithner, left, as his choice for treasury secretary, Christina Romer as Council of Economic Advisers Chair, and Lawrence Summers, right, as director of the National Economic Council, during a press conference in Chicago on November 24, 2008.
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President-elect Barack Obama tapped New York Federal Reserve President Tim Geithner as his treasury secretary on Monday, turning to a veteran of financial crises at home and overseas to lead the rescue of the nation's swooning economy.

At a news conference 57 days before his inauguration, Obama also chose Lawrence Summers as director of his National Economic Council. Summers was treasury secretary under former President Bill Clinton.

Obama said that recent news "has made it even more clear that we are facing an economic crisis of historic proportions." Offering a grim prediction, he added, "Most experts now believe that we could lose millions of jobs next year."

He said his newly minted economic aides offered "sound judgment and fresh thinking" at a time of economic peril.

President-elect Barack Obama
President-elect Barack Obama speaks while announcing his economic team during a press conference in Chicago on November 24, 2008.
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Obama stepped to the microphones one day after his aides urged the incoming Democratic-controlled Congress to work with unusual speed in passing an economic stimulus package. Some lawmakers have said a measure in the range of $700 billion over two years may be passed, in hopes of achieving the president-elect's goal of securing 2.5 million jobs.

Obama takes the oath of office on Jan. 20 as the nation's 44th president, and will confront economic difficulties as great as any since the Great Depression in the 1930s. Congress begins its work on Jan. 6.

"The economy is likely to get worse before it gets better," he said in a downbeat forecast, delivered as Americans head into the year-end holiday season.

At the same time, he expressed confidence the nation would weather the crisis "because we've done it before."

Obama spoke one day after a senior adviser, David Axelrod said, "We want to hit the ground running on Jan. 20."

President-elect Barack Obama
President-elect Barack Obama, surrounded by members of the US Secret Service, arrives to play basketball at the University of Chicago Lab School in Chicago on November 23, 2008.
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Echoing that, the second-ranking House Democrat, Rep. Steny Hoyer of Maryland, said, "We expect to have during the first couple of weeks of January a package for the president's consideration when he takes office."

While Obama and his team are focused on the work of the new Congress, they also weighed in work pending before the current one.

Axelrod warned automakers seeking billions in government help to stave off collapse to devise a plan to retool and restructure that they can present to Congress next month. Otherwise, he said, "there is very little taxpayers can do to help them."

The emphasis on the economy began Saturday when Obama outlined the framework to save or create 2.5 million jobs by the end of 2010. The scope of the recovery package is far more ambitious than Obama had spelled out during his presidential campaign, when he proposed $175 billion of spending and tax-cutting stimulus. The new plan will be significantly larger and incorporate his campaign ideas for new jobs in environmentally friendly technologies - the "green economy." It also would include his proposals for tax relief for middle- and lower-income workers.

But there were no plans to balance the tax cuts with an immediate tax increase on the wealthy. During the campaign, Obama said he would pay for increased tax relief by raising 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?"'

Some economists have endorsed spending up to $600 billion to revive the economy. Sen. Charles Schumer, D-N.Y., and former labor Secretary Robert Reich, a member of Obama's economic advisory board, both suggested $500 billion to $700 billion.

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

Axelrod and Schumer appeared on ABC's "This Week"; Hoyer and Boehner appeared on "Fox News Sunday"; Goolsbee appeared on CBS' "Face the Nation"; and Reich appeared on CNN's "Late Edition."


Associated Press writer Jim Kuhnhenn contributed to this story from Washington.