CBNNews.com - CHICAGO -- President-elect Barack Obama promised Monday to keep the commitments the outgoing Bush administration has made to rescue financial markets.
Obama also urged the new Congress to pass a major stimulus package "right away" to restore growth and create jobs.
"Most experts now believe that we could lose millions of jobs next year," Obama said at a news conference announcing his economic cabinet picks, including New York Federal Reserve President Tim Geithner to be his treasury secretary. He also chose Lawrence Summers as director of his National Economic Council. Summers was treasury secretary under former President Bill Clinton.
How Big a Plan?
While the president-elect declined to say how big a spending package he wants to revive the economy, he said "It's going to be costly."
So far, Obama's rescue plan pitch, being crafted by his advisors and some in Congress, could cost between $500 and $700 billion. During the presidential campaign, Obama said he thought it would take about $175 billion.
"This economic recovery package that he's describing is every bit in keeping with exactly the philosophy he outlined throughout the campaign for pretty much two years," Obama economic adviser Austan Goolsbee said on CBS Face the Nation Sunday. "And that is we've got to make investments in the future of this country and we've got to provide relief to ordinary Americans."
The New FDR?
That relief will come in the form of middle class tax cuts and the plan probably won't call for increasing taxes on wealthier Americans - at least not in this stimulus plan.
Instead, the bulk of the spending would be on infrastructure and public work projects so as to create jobs and kick start the economy. Obama said he would like to see the package passed by Congress by the time he is inaugurated in late January.
"It's reminiscent of Franklin Roosevelt's public works administration, putting people to work to green the country, to rebuild roads and post offices," said Robert Dallek, presidential historian.
Beyond the stimulus package, Obama will also surround himself with new key economic players. The big name - Timothy Geithner - the president of the New York Federal Reserve will become Obama's new treasury secretary, the key government point man. When his name was leaked Friday, the stock market took off, gaining 500 points.
"Tim Geithner has been at the center of all the efforts to handle the problems on wall street over the last 18 months. Nobody knows better than he exactly what's going on, who's in trouble and who needs what kind of assistance right now," said Simon Johnson, a professor at MIT Sloan School.
And speaking of assistance, the government is coming to the rescue again - this time for Citigroup. The financial company is on shaky ground so they'll get $20 billion and a guarantee on hundreds of billions of dollars in risky assets.
But during his press conference today, Obama was critical of the Big Three automakers, saying he was surprised they did not have a better-thought-out plan for their future before asking Congress to approve $25 billion in emergency loans.
Meanwhile, at a two day summit for Pacific Rim countries, leaders pledged to restrict any new tariffs in the next year that might hurt free trade. They also released a statement assuring the world that this global financial crisis can be contained in 18 months.
That statement, however, is not something anyone in America or around the world will probably be taking to the bank.