WASHINGTON — President-elect Barack Obama signaled Saturday that he will quickly seek a sweeping economic recovery plan likely to exceed the price tag of $175 billion plan that he unveiled during the campaign.
A “crisis of historic proportionsâ€Â is gripping the nation, Obama said, and it calls for “a plan big enough to meet the challenges we face.â€Â
Obama has asked his economic team to craft a plan to create 2.5 million jobs over the next two years, including some in the field of alternative energy — a two-year stimulus reaching further than his original one-year-plan. With hope of signing it soon after taking office, he plans to seek quick congressional approval.
“These aren’t just steps to pull ourselves out of this immediate crisis,â€Â Obama said in his weekly radio address. “These are the long-term investments in our economic future that have been ignored for far too long.â€Â
The announcement of a more robust stimulus plan comes amid worsening economic news over the past several weeks, with financial markets in turmoil and new home purchases hitting their lowest point in 50 years last month. In his address, Obama noted the risk of a deflationary spiral and its potential to increase the nation̢۪s debt.
Just over a month ago, Obama unveiled a proposal to help employers, automakers, homeowners and state and local government weather the economic storm, with advisers placing a $175 billion price on the plan.
At a campaign event in Toledo, Ohio, Obama proposed a $3,000 tax credit for employers for each new person they hire. He said he would eliminate income taxes on unemployment benefits, double the government̢۪s loan guarantee for automakers and allow people to borrow from retirement savings without a tax penalty, regardless of their age.
But in Saturday̢۪s address, Obama said he believes the economy has deteriorated to a point of crisis and introduced new ideas that he hadn̢۪t mentioned before. Aides to the president-elect acknowledged that Obama was widening the scope of his plan and that it would probably cost more than the $175 billion discussed before the election.
One new detail is the targeted number of 2.5 million jobs that he wants to create by 2011. He also speaks now of making it a two-year plan.
“It’s consistent with what he said before,â€Â said one Obama aide, “because of the prolonged deterioration in the economy.â€Â
Another new addition is investment in green technology. Obama has long talked about spurring job creation by putting $150 billion into alternative energy to spur creation of 5 million jobs, but not as part of his rescue plan.
On Saturday, though, he listed green jobs prominently among the investments he thinks the government should make in a stimulus plan.
“We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead,â€Â he said.
With Obama expected to officially announce key members of his economic team in the next few days, possibly as early as Monday, he plans to ask them to start drafting the stimulus package.
Obama is expected to name Timothy Geithner, head of the Federal Reserve Bank of New York, as his nominee for Treasury Secretary. He also has settled on Gov. Bill Richardson of New Mexico as his Commerce Secretary, and Congressional Budget Office chief Peter Orszag is his likely choice for White House budget director.
After his radio address Saturday, Obama officially named a key three-member team to run his White House communications operation. Robert Gibbs, a close adviser, will be press secretary, while Ellen Moran, executive director of EMILY̢۪s List, will leave her post to become director of communications. Dan Pfeiffer, a key aide in the Obama presidential campaign, will be deputy director of communications.
On Saturday, the communications all came from the president-elect himself.
“There are no quick or easy fixes to this crisis, which has been many years in the making, and it’s likely to get worse before it gets better,â€Â he said. “But January 20th is our chance to begin anew — with a new direction, new ideas and new reforms that will create jobs and fuel long-term economic growth.â€Â
By Christi Parsons / McClatchy Tribune