Obama warns economy to worsen before it improves

Obama and Shinseki
President-elect Barack Obama (L) introduces retired Gen. Eric Shinseki as his Secretary of Veterans Affairs during a press conference at the Hilton Hotel December 7, 2008 in Chicago, Illinois.
Photo by Scott Olson/Getty Images

President-elect Barack Obama wants to make something very clear: The economy is not going to immediately recover when he takes his oath of office, but he has a plan to get the country moving.

Obama introduced a recovery plan "equal to the task" that would be the largest public works spending program since the interstate highway system was build a half-century ago.

"We've got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can't worry short term about the deficit. We've got to make sure that the economic stimulus plan is large enough to get the economy moving," Obama said during an interview that aired Sunday on NBC's "Meet the Press."

Twice during the opening moments of his most extensive interview since winning the presidency on Nov. 4, the president-elect said the economic situation "is going to get worse before it gets better," an unspoken plea with voters to have patience with the incoming administration.

The economic indicators have darkened since Obama's election, and Friday's report that 533,000 jobs were lost in November was the worst performance in more than 30 years. Unemployment stands at 6.7 percent, retailers are reporting weak holiday sales and the credit markets have yet to recover from the freeze that led Congress to approve a $700 billion bailout before the election.

As congressional leaders and aides spent the weekend negotiating the details of a bailout package for automakers that leaders hope to finalize early this week, Obama repeated his position that domestic carmakers must survive the current crisis. He also accused the industry's executives of taking a "head-in-the-sand approach" that has prevented their companies from becoming more competitive.

Less than six weeks before his inauguration, Obama declined to say how large an economic stimulus plan he envisions. He said his blueprint for recovery will include help for homeowners facing foreclosure on their mortgages if President George W. Bush has not acted by Inauguration Day, Jan. 20.

"I am absolutely confident that if we take the right steps over the coming months, that not only can we get the economy back on track, but we can emerge leaner, meaner and ultimately more competitive and more prosperous," Obama told reporters in Chicago as he introduced retired Gen. Eric Shinseki as his choice to head the Veterans Affairs Department.

While the country struggles with an economic crisis, Obama said it's important that the president use the White House as a rallying point for national pride.

"Thinking about the diversity of our culture and inviting jazz musicians, and classical musicians, and poetry readings in the White House so that once again we appreciate this incredible tapestry that's America, you know, that, I think, is going to be incredibly important, particularly because we're going through hard times," Obama said.

"And historically what has always brought us through hard times is that national character, that sense of optimism, that willingness to look forward, that sense that better days are ahead."


Associated Press writers Stephen Ohlemacher in Washington and Philip Elliott in Chicago contributed to this report.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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