Obama senior adviser David Axelrod warned U.S. automakers, seeking billions in government help to stave off collapse, to devise a plan to retool and restructure. Otherwise, he said, “there is very little taxpayers can do to help them.”
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WASHINGTON — President-elect Barack Obama wants the new Congress to approve massive spending and fresh tax cuts in January, “a big number” probably far distancing a $175 billion campaign proposal, so he can sign it after taking office, top aides said Sunday.
Obama over the weekend outlined the framework of a plan to save or create 2.5 million jobs by the end of 2010 and prepared to introduce leaders of his economic team Monday. Aides said they soon would fill in the details and Democratic lawmakers, already working with transition officials, pledged to act quickly when Congress convenes Jan. 6, two weeks before the inauguration.
“We don’t have time to waste here, ” Obama senior adviser David Axelrod said. “We want to hit the ground running on January 20th.” Echoing that, the second-ranking House Democrat, Rep. Steny Hoyer of Maryland, said, `We expect to have during the first couple of weeks of January a package for the president’s consideration when he takes office.”
Axelrod also warned automakers, seeking billions in government help to stave off collapse, to devise a plan to retool and restructure. Otherwise, he said, “there is very little taxpayers can do to help them.”
During the campaign Obama had proposed a $175 billion economic recovery package. The new one will be significantly larger and would incorporate his campaign ideas for new jobs in environmentally friendly technologies – the “green economy.” It also would include his proposals for tax relief for middle- and lower-income workers.
But aides said the plan would not offer an immediate tax increase on wealthy taxpayers. During the campaign, Obama said he would pay for increased tax relief by raising taxes on people making more than $250,000.
“There won’t be any tax increases in the January package,” said one Obama aide, who spoke on condition of anonymity because the details of the Obama package have not been fleshed out.
Obama could delay any tax increase to 2011, when current Bush administration tax cuts expire.
House Republican leader John Boehner of Ohio urged Obama to make that explicit. “Why wouldn’t we have the president-elect say, `I am not going to raise taxes on any American in my first two years in office?'”
Advisers would not discuss a specific size of the new plan, though some economists have endorsed spending up to $600 billion to revive the economy. Sen. Charles Schumer, D-N.Y., suggested $500 billion to $700 billion.
“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. “It has to be. The point is to, kind of, get people back on track and startle the thing into submission.”
While Obama in the weekend Democratic radio address said his plan “will mean 2.5 million more jobs by January of 2011,” aides said the figure was a net sum of jobs created and jobs saved that would otherwise disappear without government help.
Axelrod said the president-elect’s transition team was gratified by the stock market’s positive reaction to Obama’s choice of Timothy Geithner as treasury secretary. The market soared almost 500 points on Friday with word Obama had settled on the 47-year-old Geithner (pronounced GITE-ner) to lead his new economic team.
“The response has been great, and it should be – Tim Geithner is uniquely qualified to do this job,” Axelrod said.
Among the most pressing economic issues is the fate of the auto industry. Congress last week rebuffed appeals for help from executives from GM, Chrysler and Ford. Congressional leaders urged them to return next month with a specific reorganization plan that spelled out how much money they need and how they intended to remain financially viable.
Axelrod said “the signal sent by Congress was the right one.”
The auto executives did not make a strong impression during congressional hearings last week – appearances that were further undermined upon news that they had flown to Washington in corporate jets.
Axelrod couldn’t resist taking a jab at the executives. “I hope that they will come back to Washington in early December – on commercial flights – with a plan,” he said.
While news of Obama’s probable treasury secretary rallied markets on Friday, the Dow had lost a staggering 873 points, more than 10 percent of its value, and the broader Standard & Poor’s 500 index had sunk to its lowest level since 1997 in the previous two days.
In addition to Geithner, Obama planned to announce on Monday the selection of Larry Summers, as head of the National Economic Council. Geithner would have chief responsibility for tackling the economic slowdown and credit crunch. At the New York Fed, he has played a critical role in the government’s response to the financial crisis and has worked closely with Treasury Secretary Henry Paulson and Ben Bernanke, the Fed chairman.
Summers, 53, treasury secretary under President Bill Clinton and one-time president of Harvard University, will advise Obama from the White House. Summers would help coordinate federal response.
New Mexico Gov. Bill Richardson is Obama’s pick to be commerce secretary, adding a prominent Hispanic and one-time rival for the Democratic nomination to his expanding Cabinet. Obama planned to announce the nomination after Thanksgiving, according to a Democratic official familiar with the discussions. The official was not authorized to speak publicly about the negotiations and did so on condition of anonymity.
Richardson was U.N. ambassador under President Bill Clinton and later energy secretary. He also served in the House from 1983 to 1997.
Axelrod appeared on “Fox News Sunday” and ABC’s “This Week.” Schumer was on ABC, Hoyer and Boehner on Fox and Goolsbee was interviewed on “Face the Nation” on CBS.