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Obama seeks 'jolt' to economy

The president-elect, emphasizing a need to 'act swiftly and boldly,' signals he's already begun to take charge.

November 25, 2008|Peter Nicholas and John McCormick | Nicholas and McCormick are writers in our Washington bureau.

WASHINGTON AND CHICAGO — With the dramatic weekend rescue of Citigroup showing that the financial crisis remains an ongoing threat, President-elect Barack Obama introduced the central players of his new economic team Monday and charged them with developing a plan to stabilize the financial system and the job market.

Flanked in Chicago by officials who will shape his economic recovery plan, including his nominee for Treasury secretary and his chief economic advisor, Obama sought to drive home the message that he is already attacking the financial crisis two months before taking power.

In prior appearances, Obama has cautioned that the nation has only "one president at a time" and that he does not want to intrude on President Bush's prerogatives. But with iconic financial institutions collapsing, he seemed intent on projecting an image of a sober leader determined to move fast.

"It is my hope that the new Congress will begin work on an aggressive economic recovery plan when they convene in early January, so that our administration can hit the ground running," Obama said at a news conference in his hometown, where he introduced Timothy F. Geithner as his nominee for Treasury secretary and Lawrence Summers as his chief economic advisor.

"If we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," Obama warned.

The push to convey stability also came from Washington, where Bush, standing beside Treasury Secretary Henry M. Paulson on the steps of the Treasury Department, said his administration was working with Obama's transition team. "There is close cooperation," Bush assured.

Obama said his new team, as it writes its recovery plan, would consult with Congress and the Bush administration on its efforts, and that it would brief him daily.

"That work starts today, because the truth is we do not have a minute to waste," he said.

Between Obama's announcement and news of the Citigroup bailout, the stock market rallied for the second day in a row. The two-day surge of 891 points is the largest in percentage terms over two days since October 1987.

By making the nomination of a Treasury secretary his first formal Cabinet announcement, Obama also sent a message that stabilizing the faltering economy would be a central focus of his administration.

Due to leaks last week, his choice of Geithner, 47, president of the Federal Reserve Bank of New York, came as little surprise. In his current role with the Fed, Geithner was involved over the weekend in the government's efforts to shore up the faltering finances of Citigroup, the massive bank and financial services company.

Obama's team includes other accomplished economists with deep experience in Washington. His choice to head the National Economic Council is Summers, a Treasury secretary in the Clinton administration. Widely considered one of the nation's most brilliant economists, Summers became one of the youngest tenured professors at Harvard University when he was 28. He later served as the university's president.

Christina D. Romer will lead the Council of Economic Advisors, which tracks economic data for the president and recommends policy. A professor at the UC Berkeley, Romer's work has included studying causes of the Great Depression.

Melody Barnes will serve as director of the Domestic Policy Council. Barnes was an aide to Sen. Edward M. Kennedy (D-Mass.) and an executive at the Center for American Progress, a left-of-center think tank involved in planning Obama's transition.

Geithner and Romer must be confirmed by the Senate.

Today, Obama is set to announce his new director of the Office of Management and Budget, which prepares the president's version of the federal budget. A source familiar with events said the job would go to Peter R. Orszag, a specialist in healthcare policy and director of the Congressional Budget Office.

Geithner is expected to win easy confirmation by the Senate, but a key question is how intensely senators will grill him on his role -- which was substantial -- in developing the Bush administration's financial rescue policies over the last few months.

"Sure, people have raised the question: 'Aren't his fingerprints on some of the problems so far,' " said Jared Bernstein, an economist who has been an informal advisor to Obama. "But at the same time, Geithner knows these books very well and has a very good feel for the weaknesses in the banking system."

A prominent Republican gave the nominations guarded support.

Sen. Charles E. Grassley of Iowa said: "During the campaign, the kind of change that the president-elect promised was so undefined it made me nervous. Now that he's appointing familiar faces from the Clinton administration to very high-level positions, I'm less concerned."

Obama portrayed his team as immensely talented.

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