Obama sets goals

Citing an "economic crisis of historic proportions," President-elect Obama urged Congress to pass a costly, job-creating stimulus bill as quickly as possible, a rare pre-inaugural call to action delivered as the outgoing Bush administration approved fresh billions to bail out one of the nation's largest banks.

Stock prices surged higher -- the biggest two-day percentage gain for the Dow Jones industrials in 21 years -- as investors took heart yesterday from the actions and words of the incoming and departing chief executives.

"If we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," said Obama, 57 days shy of taking office in the shadow of the worst eco­nomic crisis since the Great Depression.

He blended criticism of Detroit's beleaguered Big Three automakers -- General Motors Corp., Ford Motor Co. and Chrysler LLC -- with a pledge of support for government aid to help them survive.

"We can't allow the auto industry to ... vanish," he said, although he added that a blank check for an industry resistant to change was not the solution to its long-term decline.

At a news conference in which he introduced his administration's top economic officials, Obama said that restoring the economy to health took priority over deficit concerns. Still, he said he would be looking for "meaningful cuts and sacrifices" to restrain federal spending.

Obama and President George W. Bush spoke by telephone during the day, their first disclosed conversation since a visit at the White House more than a week ago, and each man appeared eager to show a transition proceeding smoothly.

At the same time, the juxtaposition of the outgoing and incoming chief executives grappling with the economy underscored the severity of a crisis that has sent joblessness rising, caused a large increase in mortgage foreclosures, and crippled the credit markets.

Bush said his administration's dramatic overnight rescue of Citigroup Inc. was necessary to safeguard the U.S. financial system and help the economy recover. He said that more such moves might follow if other institutions need help. Officials said that the government may invest $20 billion in the company, and guarantee $306 billion in risky assets.

Encouraged by the action, investors sent the Dow Jones industrials up 397 points. Coupled with Friday's gain, that meant an 891-point increase over two trading days, the biggest percentage gain since October 1987.

Obama made a point of saying that his administration "will honor the public commitments made by the current administration to address this crisis," words of reassurance to the financial markets.

Remarkably for a president-elect, he said he wanted Congress to act "right away" on a stimulus bill that would blend spending and tax cuts. Asked for details, he said without elaboration that he wanted a bill "of a size and scope that is necessary to get this economy back on track."

His forecast was sober. He said that there are neither shortcuts nor quick fixes.

"The economy is likely to get worse before it gets better. Full recovery will not happen immediately," he said. At the same time, he coupled those sentiments with optimism. "I know we can work our way out of this crisis because we have done it before."

The new Congress will come into session Jan. 6, two weeks before Obama takes the oath of office as the nation's 44th president.

Democratic leaders have said they are eager to spend the time before then working on the legislation that he wants, and Obama had scarcely made his remarks when political jockeying broke out about the details.

Senate Majority Leader Harry Reid, D-Nev., said that Democrats in Congress share Obama's "sense of urgency, which is why we will work quickly to pass a substantial economic recovery package that creates good-paying jobs here in America, cuts taxes for the middle class and stabilizes a volatile market."

In something of a challenge, he added, "With the cooperation of our Republican colleagues, we intend to send a plan to the White House as soon as possible following President-elect Obama's inauguration."

House Republican Leader John Boehner of Ohio said, "I look forward to working with President-elect Obama," but he quickly added he hoped Democrats would listen to those "who do not believe increasing government spending is the best way to put our economy back on track."

He called for eliminating the tax on gains from investment and for cutting taxes on middle-class families and small businesses, among other steps.

Nominally, Obama called the news conference to introduce the top members of the economic circle of advisers who will join his administration.

As Treasury secretary he turned to New York Federal Reserve President Timothy Geithner, who also has experience at the International Monetary Fund and in the Clinton administration's Treasury Department.

In recent months Geithner, 47, has worked closely with the Bush administration on the bailout of the financial industry, and earlier in his career he was involved in responding to international financial crises overseas.

Obama chose a former Treasury secretary, Lawrence Summers, to head the National Economic Council. He named Christina Romer, an economics professor, as chairwoman of his Council of Economic Advisers. Melody Barnes, a former aide to Sen. Edward M. Kennedy, was named director of the White House Domestic Policy Council.

The appointment of Geithner was the first Cabinet selection that Obama has announced, a distinction meant to underscore the economy's importance as he prepares to take office.

Democratic officials have said that Obama is on track to name former rival Hillary Clinton, a New York senator, as secretary of state, and Eric Holder, a former Justice Department official in the Clinton administration, as attorney general.

Robert Gates, the defense secretary during Bush's last two years in office, is a possible holdover, at least for several months, aides to Obama have said.

Obama offered few details about the economic-stimulus bill that he wants from the new Congress, saying he would ask his new team of advisers to consult with legislators.

As a candidate, he supported a $175 billion bill, but the economy has worsened, and many legislators and economists argue for a more robust jolt. Obama said his goal is to create 2.5 million jobs by "rebuilding our infrastructure, our roads, our bridges, modernizing our schools and creating the clean energy infrastructure of the 21st century."

Asked about the effect on the deficit, already on the way to smashing records, Obama said, "We have to first focus on making sure that we're creating those 2.5 million jobs."

Obama said he wants to move ahead with his pledge to cut taxes for the middle class. But he was vague about his pro­mise to roll back Bush-era tax breaks for the wealthy, and aides said his plan won't include the increases he had long advocated on people earning more than $250,000.

Timothy Geithner

• Age, birth date, location: 47; Aug. 18, 1961, New York City.

• Experience: Nominated by President-elect Obama as Treasury secretary on Nov. 24, 2008; chief executive of the Federal Reserve Bank of New York, 2003-present; senior fellow in international economics, Council on Foreign Relations, February to August 2001; director of the Policy Development and Review Department of the International Monetary Fund, 2001-03; undersecretary of the Treasury for international affairs, 1998-01; assistant financial attache at the U.S. Embassy in Tokyo, assistant secretary and senior deputy assistant secretary of Treasury for international affairs, Treasury Department, 1988-98; Kissinger Associates Inc., 1985-88.

• Education: B.A., government and Asian studies, Dartmouth College, 1983; M.A. in international economics and East Asian studies, Johns Hopkins School of Advanced International Studies, 1985.

• Family: Wife, Carole Sonnenfeld Geithner; two children.

Lawrence Summers

• Age, birth date, location: 53; Nov. 30, 1954; New Haven, Conn.

• Experience: Managing director, D.E. Shaw Group, 2006-present; president, Harvard University, 2001-06; Treasury secretary, 1999-2001; deputy Treasury secretary, 1995; undersecretary of the Treasury for international affairs, 1993-95; chief economist, World Bank, 1991-93; professor of economics, Harvard University, 1983-93; domestic policy economist, President Ronald Reagan's Council of Economic Advisers, 1982-83; faculty, Massachusetts Institute of Technology, 1979-82.

• Education: B.S., MIT, 1975; Ph.D., Harvard University, 1982.

Melody Barnes

• Age, birth date, location: 44; April 29, 1964, in Richmond, Va.

• Experience: Chosen by President-elect Obama to be the director of the White House Domestic Policy Council on Nov. 24, 2008; co-director, agency review working group for the Obama-Biden transition team, 2008; senior domestic policy adviser, Obama campaign, 2008; executive vice president for policy at the Center for American Progress, 2004-08; principal, The Raben Group, LLC, 2003-05; chief counsel to Sen. Edward M. Kennedy on the Senate Judiciary Committee, 1995-03; director of legislative affairs for the U.S. Equal Employment Opportunity Commission; assistant counsel to the House Judiciary Subcommittee on Civil and Constitutional Rights; attorney, Shearman & Sterling.

• Education: Bachelor's degree, University of North Carolina, 1986; law degree, University of Michigan, 1989.

Christina Romer

• Age, birth date, location: 49, Dec. 25, 1958, in Alton, Ill.

• Experience: Chosen by President-elect Obama as chairwoman of the White House Council of Economic Advisers on Nov. 24, 2008; professor of economics, University of California, Berkeley, 1988-present; professor of economics and public affairs, Woodrow Wilson School, Princeton University, 1985-88.

• Education: Bachelor's degree, College of William and Mary, 1981; Ph.D., Massachusetts Institute of Technology, 1985.

• Family: Husband, David H. Romer, a UC-Berkeley economics professor; and three children.