Obama seeks massive spending for economy

Top Obama aides said the incoming president wants Congress to have a two-year economic aid plan of massive spending and new tax cuts.

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November 24, 2008 10:02
3 minute read.
Obama seeks massive spending for economy

Barack Obama 88. (photo credit: )

President-elect Barack Obama laid the foundation Sunday for his new administration, readying a plan for massive government spending and calling on a trusted central bank figure to help lift the economy out of a financial morass not seen in eight decades. Top Obama aides said the incoming president wants Congress to have a two-year economic aid plan of massive spending and new tax cuts ready for him to enact into law by the time he takes the oath of office on Jan. 20. Obama this weekend gave the general contours of a plan to save or create 2.5 million jobs by the end of 2010. His aides said they would be working on the details over the next month so that lawmakers could begin fashioning legislation when the new Congress convenes on Jan. 6. "Our hope is that the new Congress begins work on this as soon as they take office in early January, because we don't have time to waste here, " Obama senior adviser David Axelrod said Sunday. "We want to hit the ground running on January 20th." That would give Congress two weeks to hold hearings and write legislation before Obama's swearing-in. Axelrod also warned automakers, which have been seeking billions of dollars in government aid, to devise a plan to retool and restructure their industry. Otherwise, he said, "there is very little taxpayers can do to help them." During the campaign Obama had called for a $175 billion economic recovery package. The one he now envisions would be significantly larger but would incorporate his campaign proposals for new jobs in environmentally friendly technologies - the so-called "green economy." The plan also would include his proposals for tax relief for middle- and lower-income workers. But aides said the plan would not include an immediate tax increase on wealthy taxpayers. During the campaign Obama said he would pay for tax relief for middle-income families by raising taxes on people who make more than $250,000. "There won't be any tax increases in the January package," one Obama aide said Sunday. The adviser spoke on the condition of anonymity because the details of the Obama package haven't been fleshed out. Instead, Obama could let taxes on upper-income families increase when the current Bush administration tax cuts expire in 2011. Advisers would not discuss a specific size of the new economic plan, though economists have called for spending up to $600 billion to shock the economy back into a positive trajectory. "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 on CBS television. "It has to be. The point is to, kind of, get people back on track and startle the thing into submission." On the domestic front, Obama senior adviser David Axelrod confirmed that the president-elect would name Timothy Geithner, the New York Federal Reserve president, as his treasury secretary on Monday. Axelrod spoke Sunday on Fox News. The move followed in one-two fashion Obama's declaration on Saturday that his administration planned to create 2.5 million jobs over the next two years. Geithner will team with Lawrence Summers, a treasury secretary under former President Bill Clinton and former Harvard University president, who will take over the National Economic Council. The men will confront an economic crisis that continues to deepen in spite of hundreds of billions of dollars in federal emergency spending in recent weeks. Word of Geithner's likely selection Friday helped send the Dow Jones Industrials soaring 6.5 percent after several days of steep losses. Both Geithner and Summers will appear with Obama at a Monday news conference in Chicago. Also Sunday, a Democratic official said Obama would name New Mexico Gov. Bill Richardson as commerce secretary after the Thanksgiving holiday. The official spoke on condition of anonymity because the official was not authorized to speak publicly about the negotiations. Richardson was energy secretary and UN ambassador under Clinton. He would be the most visible Hispanic named to Obama's Cabinet. The president-elect is virtually certain to offer Congressional Budget Office chief Peter Orszag the job of directing the White House Office of Budget and Management, and Orszag is likely to accept, Democratic officials said Saturday.


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