A Closer Look At Obama's Picks For Economic Team

For the second time in as many days, President-elect Barack Obama is scheduled to meet with reporters to discuss the sagging economy. On Monday, he sketched out plans for a massive government spending effort aimed at jump-starting businesses and saving or creating 2.5 million jobs. On Tuesday, aides say, Obama will be talking about ways to reform the federal budget so that taxpayers' dollars are spent wisely.

Obama has asked his team of economic advisers to get to work immediately on an economic recovery plan aimed at restoring confidence in financial markets and among ordinary families. He hopes to have a plan ready when the new Congress convenes in early January.

"With our economy in distress, we cannot hesitate and we cannot delay," Obama said Monday. "Our families cannot afford to keep on waiting and hoping for a solution."

The president-elect hasn't attached a dollar figure to his stimulus plan, but says it should be big enough to jolt the economy back into shape. On Monday, he began to introduce the team that will help shape his economic policies, beginning with his nominee for Treasury secretary: Timothy Geithner.

"Tim served with distinction under both Democrats and Republicans, and has a long history of working comfortably and as an honest broker on both sides of the aisle," Obama said.

As president of New York's Federal Reserve Bank, Geithner has been deeply involved — for better or worse — in efforts to shore up Wall Street. Before that, he worked at the Treasury Department, where economist Brad DeLong, now at the University of California, Berkeley got to know and admire him.

"He had tact and ability to assemble consensus, in terms of not only being very smart, but also allowing other people to be and think they were smart if it was part of what got the job done," DeLong said.

That's not a description many people would apply to former Treasury Secretary Lawrence Summers, Geithner's mentor who was also a candidate for the Cabinet post. Instead, Obama chose Summers to serve inside the White House, as the head of his National Economic Council.

Summers is one of the country's most highly regarded economists. But Dean Baker of the liberal Center for Economic and Policy Research complains that as Treasury secretary, Summers championed some of the financial deregulation that's contributed to the current mess.

"I think a lot of people voted for President-[elect] Obama hoping that there would be some changes, and what we're seeing here is we're getting a lot of people who were there in the Clinton administration," Baker said. "It is somewhat disconcerting."

The president-elect says he's choosing economic advisers with a balance of experience and fresh ideas.

Obama is standing by his promise to cut taxes for most Americans while raising taxes on those making more than a quarter-million dollars a year. He won't say whether he plans to ask for those tax increases on rich families right away, or simply let their tax rates climb in a couple of years, as scheduled.

"It's important, if we're going to help pay for some of these expenditures that are absolutely necessary to get our economy back on track, that those who are in a position to pay more, do so," Obama says. "Whether that's done through a repeal or whether that's done because the Bush tax cuts are not renewed is something that my economic team will be providing me a recommendation on."

Obama is also waiting to hear more from domestic automakers about how they might use possible government assistance to retool for the future. He says that while the federal government should not allow American automakers to simply "vanish," any financial aid should be conditioned on steps to ensure the companies' long-term sustainability.

"Taxpayers don't want to see more money wasted," Obama says.

That goes for other government spending, as well.

In order to pay for necessary investments, Obama says, the government will have to find meaningful savings elsewhere. Aides say that on Tuesday he'll talk about ways to reform the budget, make government spending smarter and save money in areas such as health care. He is also expected to name the director of the Congressional Budget Office to run his own Management and Budget office in the White House.

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