Economy

Obama To Deliver Major Economic Address

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President-elect Obama suggests his economic stimulus package would add up to about $775 billion over two years, but not the trillion dollar estimate that some economists have called for. Obama delivers a major speech on the economy Thursday. He's expected to make the case for urgent action on his stimulus package — a plan aimed at creating millions of jobs.

ARI SHAPIRO, host:

It's Morning Edition from NPR News. Sitting in for Steve Inskeep, I'm Ari Shapiro.

RENEE MONTAGNE, host:

And I'm Renee Montagne. President-elect Barack Obama will deliver a major speech on the economy this morning. He's expected to make his case for urgent action on his stimulus plan. That plan is aimed at creating and saving some three million jobs. Economists say the next unemployment numbers could show more than half a million additional jobs were lost last month. NPR's John Ydstie has more.

JOHN YDSTIE: All this week, President-elect Obama has been laying the groundwork for his stimulus package. Monday on Capitol Hill, he told lawmakers the economic situation is bad and getting worse. He's likely to repeat that sentiment to the rest of the country in his speech today in order to sweep aside concerns about the immense size of the package. The Obama team has suggested it could reach between $675 and $775 billion over two years. In a news conference yesterday, Mr. Obama said he is still consulting with Congress on the final number.

(Soundbite of News Conference)

President-elect BARACK OBAMA: We expect that it will be on the high end of our estimates, but will not be as high as some economists have recommended.

YDSTIE: Some economists have suggested the stimulus package needs to be as much as $1.3 trillion over two years. Mr. Obama said that would be too much given the projected level of the federal deficit, $1.2 trillion this year, according to a new estimate from the Congressional Budget Office yesterday.

(Soundbite of News Conference)

President-elect OBAMA: We're going to be inheriting a trillion-plus dollar deficit, and if we do nothing, then we will continue to see red ink as far as the eye can see. And at the same time we have an economic situation that is dire, and we're going to have to jumpstart this economy with my economic recovery plan. Creating three million jobs, that's going to cost some money.

YDSTIE: So in the short term, Obama admitted the deficits could go even higher. Yesterday, he tried to demonstrate his seriousness about reducing deficits and making governments more efficient by naming the government's first ever chief performance officer. She is Nancy Kellifer, a director of the big management consulting firm McKinsey and Company. Mr. Obama said she will scour the budget to eliminate programs that aren't needed or don't work. In addition, he said taming the deficit will require addressing the costs of entitlement programs like Medicare and Social Security.

(Soundbite of News Conference)

President-elect OBAMA: We are beginning consultations with members of Congress around how we expect to approach the deficit. We expect that discussion around entitlements will be a part - a central part of those plans.

YDSTIE: The president-elect said he would have more to say about his approach to controlling entitlement spending by February, when he outlines his first budget. In his speech today, Mr. Obama is expected to provide more details on his stimulus package. He said his economic team has been focusing not only on creating short-term jobs and jumpstarting the economy, but doing it with programs that have a lasting impact. He gave this example.

(Soundbite of News Conference)

President-elect OBAMA: Part of our stimulus package is going to involve revamping all federal buildings so that they're energy efficient. If we do that effectively, then over the long-term we are going to save billions of dollars in energy costs for the federal government and for taxpayers.

YDSTIE: Mr. Obama said his stimulus package will also include investments in areas like health care and education, in addition to middle-class tax cuts and infrastructure spending. Today's speech could also be an opportunity for Mr. Obama to attempt to restore some confidence in the investment community, especially in light of the continuing revelations about the $50 billion fraud allegedly perpetrated by Bernard Madoff. Yesterday in an interview with CNBC, the president-elect said he would have a framework for reform ready within a few months.

(Soundbite of CNBC Interview)

President-elect OBAMA: Wall Street has not worked, the a regulatory system has not worked the way it's supposed to. So it's going to be a substantial overhaul. We're going to have better enforcement, better oversight, better disclosure, increased transparency.

YDSTIE: Mr. Obama also told CNBC that given the weakness in the economy, he was now leaning toward leaving the Bush tax-cuts in place for the time being. And he said he would unveil a plan aimed at preventing foreclosures in the next month or two. John Ydstie, NPR News, Washington.

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