Obama wants swift action on massive recovery plan

May keep tax cut; Richardson gets picked for team

President-elect Barack Obama arrived at the University of Chicago Lab School, where he played basketball yesterday. President-elect Barack Obama arrived at the University of Chicago Lab School, where he played basketball yesterday. (Charles Dharapak/ Associated Press)
By Jim Kuhnhenn
Associated Press / November 24, 2008
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WASHINGTON - President-elect Barack Obama signaled yesterday that he will move urgently and aggressively to rescue the plunging economy, calling on Congress to swiftly pass a massive two-year spending and tax-cutting recovery program.

Obama's plans, outlined by his transition team yesterday, could put aside his campaign pledge to repeal a Bush tax cut for the wealthy. With the downturn in the economy, those tax cuts may remain in place until they are scheduled to die in 2011, said William M. Daley, an economic adviser.

Obama aides want lawmakers to reach agreement, before the Jan. 20 inauguration, on legislation that meets Obama's two-year goal of saving or creating 2.5 million jobs. Democratic leaders vowed to move quickly on the plan when Congress convenes Jan. 6, so he can sign it soon after taking office.

As Obama's economic team continued to jell yesterday, aides confirmed that he has chosen Governor Bill Richardson of New Mexico to be commerce secretary, adding a prominent Hispanic and one-time Democratic rival to his Cabinet.

Obama will reveal the team at a news conference in Chicago this morning, his transition office said.

He plans to name Timothy Geithner, president of the New York Federal Reserve, as his Treasury secretary, and former Treasury Secretary Lawrence Summers as the director of the White House National Economic Council. Peter Orszag, director of the Congressional Budget Office, is in line to lead the Office of Management and Budget.

"We don't have time to waste here," Obama senior adviser David Axelrod told Fox News. "We want to hit the ground running on Jan. 20."

"We expect to have during the first couple of weeks of January a package for the president's consideration when he takes office," said Representative Steny Hoyer of Maryland, the second-ranked House Democrat, who appeared on CBS's "Face the Nation."

Senator Charles Schumer of New York said on ABC's "This Week" that the package will cost $500 billion to $700 billion. Axelrod said only that it would be "a big number," probably far outdistancing the $175 billion stimulus plan that Obama proposed during the campaign.

Obama plans to announce the nomination of Richardson after Thanksgiving, according to a Democratic official familiar with the discussions who spoke on condition of anonymity.

Richardson, 61, had a distinguished and visible career in Washington before returning to New Mexico, where he was elected governor in 2002. He served as UN ambassador under President Clinton and later as energy secretary. He was in the House from 1983 to 1997.

Summers, 53, was Clinton's Treasury secretary from 1999 to 2001, when he became president of Harvard University. He resigned the Harvard post five years later after remarks suggesting that women might not have the aptitude to excel in science and mathematics.

Obama's team is expected to take a hands-on role to influence congressional action during the final weeks of the transition. "We're out with the dithering," said economic adviser Austan Goolsbee.

Obama's advisers didn't limit their comments yesterday to the long-term economic recovery. Axelrod warned automakers, seeking billions in government help to stave off collapse, to devise a plan to retool and restructure by next month. Otherwise, he said, "there is very little taxpayers can do to help them."

The Big Three executives left Congress empty-handed last week after flying into Washington in corporate jets to plead for money.

"I hope that they will come back to Washington in early December - on commercial flights - with a plan," Axelrod said.

The emphasis on the economy began Saturday when Obama outlined his job-creation plan, possibly including programs to improve roads, bridges, and schools, as well development of new technologies.

The scope of the recovery package is far more ambitious than what Obama had spelled out during his presidential campaign, when he proposed $175 billion of spending and tax-cutting stimulus.

The new one will be significantly larger and would 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.

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. Schumer and former labor Secretary Robert Reich, a member of Obama's economic advisory board, both suggested $500 billion to $700 billion.

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