With the dramatic weekend rescue of Citigroup showing that the financial crisis remains an ongoing threat, President-elect Barack Obama introduced the central players of his new economic team on Monday and charged them with developing a plan to stabilize the financial system and the job market.
Flanked by those who will shape his economic recovery plan, including his nominee for Treasury secretary and his chief economic adviser, Obama sought to drive home the message that he is already engaged in ending the financial crisis two months before taking power.
In prior appearances, Obama has cautioned that the nation has only “one president at a time” and that he does not want to intrude on President George W. Bush’s prerogatives. But with iconic financial institutions collapsing, he seemed intent on projecting an image of a sober leader determined to move fast.
“It is my hope that the new Congress will begin work on an aggressive economic recovery plan when they convene in early January, so that our administration can hit the ground running,” Obama said at a Chicago news conference, where he introduced Timothy Geithner as his nominee for Treasury secretary and Lawrence Summers as his chief economic adviser.
Obama warned that “if we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year.”
The push to convey stability also came from Washington, where Bush, standing beside Treasury Secretary Henry Paulson on the steps of the Treasury Department, said his administration was working with Obama’s transition team. “There is close cooperation,” Bush assured.
Obama said his new team, as it creates its recovery plan, would also consult with Congress and the Bush administration on their continuing efforts, and would brief him daily. “That work starts today,” he said, “because the truth is we do not have a minute to waste.”
Between Obama’s announcement and news of the Citigroup bailout, the stock market rallied for the second session in a row. The two-day surge of 891 points is the largest in percentage terms over two days since October 1987.
By nominating a Treasury secretary as his first formal Cabinet announcement, Obama also sent an unmistakable message that stabilizing the faltering economy will be his administration’s central focus.
After news leaks last week, his choice of Geithner, 47, president of the Federal Reserve Bank of New York, came as little surprise. In his current role with the Fed, Geithner was involved over the weekend in the government’s efforts to shore up the faltering finances of Citigroup, the massive bank and financial services company.
Obama’s team includes other accomplished economists with deep experience in Washington. His choice to head the National Economic Council is Summers, a Treasury secretary in the Clinton administration. Widely considered one of the nation’s most brilliant economists, Summers, at age 28, became one of the youngest-ever tenured professors at Harvard University. He later served as the university’s president.
Christina Romer will lead the Council of Economic Advisers, which tracks economic data for the president and recommends policy. Romer is a professor at the University of California at Berkeley; her work has included studying the causes of the Great Depression.
Melody Barnes will serve as director of the Domestic Policy Council. Barnes was an aide to Sen. Edward Kennedy (D-Mass) and an executive at the Center for American Progress, a left-of-center think tank that is deeply involved in planning Obama’s transition.
Of the four, Geithner and Romer must be confirmed by the Senate.
On Tuesday, Obama is set to announce his new director of the Office of Management and Budget, which prepares the president’s version of the federal budget. A source familiar with events said the job would go to Peter Orszag, a specialist in health-care policy who is director of the Congressional Budget Office.
Geithner is expected to win easy confirmation by the Senate, but a key question is how intensely senators will grill him on his substantial role in developing the Bush administration’s financial rescue policies over the last few months.
“Sure, people have raised the question: ‘Aren’t his fingerprints on some of the problems so far?'” said Jared Bernstein, an economist who has been an informal adviser to Obama. “But at the same time, Geithner knows these books very well and has a very good feel for the weaknesses in the banking system.”
Sen. Chuck Grassley (R-Iowa), who was nervous about Obama before, said: “Now that he’s appointing familiar faces from the Clinton administration to very high-level positions, I’m less concerned.”
Obama portrayed his team as immensely talented.
Fixing the economy “won’t be easy,” Obama said, “and it won’t happen overnight. We’ll need to bring together the best minds in America to guide us. And that is what I’ve sought to do in assembling my economic team.”
More Top Picks Best Magnesium Supplements For Adults
Obama unveiled his choices in a period of widespread anxiety.
With the Bush administration set to relinquish power in less than two months, the economic meltdown is unfolding amid what some analysts call a leadership vacuum. Obama seemed eager to demonstrate that he was filling the void.
Experts on the presidency said Obama cannot afford to look detached.
“There’s this confidence gap in the market, and I think people are looking to him right now to provide a measure of certainty during a period of great anxiety,” said Paul Light, a professor at New York University’s Robert F. Wagner Graduate School of Public Service.
As Obama unveiled his new Treasury secretary, Bush met with the current one and spoke of the importance of a smooth transition from one administration to the next.
He also said more bailouts could be on the horizon.
“We have made these kinds of decisions in the past — made one last night — and if need be we’re going to make these kinds of decisions to safeguard our financial system in the future,” Bush said.
– – –
Director, Domestic Policy Council: Melody Barnes
Experience: Executive vice president for policy at the Center for American Progress, a Democratic think tank in Washington. Served for eight years as chief counsel to Sen. Edward Kennedy (D-Mass.) on the Senate Judiciary Committee, focusing on immigration, crime, civil rights and other issues. Also worked as director of legislative affairs for the U.S. Equal Employment Opportunity Commission and assistant counsel to the House Judiciary Subcommittee on Civil and Constitutional Rights.
Education: Undergraduate degree from University of North Carolina; law degree from University of Michigan.
– – –
Treasury secretary: Timothy Geithner
Experience: President and CEO of the Federal Reserve Bank of New York, where he has played a key role in fighting the collapse of the financial system amid the current credit crisis. Served in the Treasury Department under three presidents since 1988, including a stint as undersecretary of the treasury for international affairs. Previously director of the policy development and review department at the International Monetary Fund.
Education: Graduate of Dartmouth College and Johns Hopkins School of Advanced International Studies, he grew up partly in Africa and has lived and worked throughout Asia. He has studied Chinese and Japanese.
– – –
Chairwoman, Council of Economic Advisers: Christina Romer
Experience: Economics professor at the University of California-Berkeley and co-director of the monetary economics program at the National Bureau of Economic Research. Known for her work on the country’s recovery from the Great Depression, she has researched subjects ranging from tax policy to the nature of recessions. Previously an assistant professor of economics and public affairs at Princeton University’s Woodrow Wilson School of Public and International Affairs; also a visiting scholar at the Federal Reserve System board of governors.
Education: Undergraduate degree from College of William and Mary; doctorate from Massachusetts Institute of Technology.
– – –
Director, National Economic Council: Lawrence Summers
Experience: Treasury secretary under President Bill Clinton. Obama called him “the central architect” of policies that led to the longest economic expansion in American history. Harvard University president from 2001 to 2006, though his tenure was marked by impolitic remarks that angered women and African-Americans, which helped lead to his resignation. Previously chief economist, World Bank; economics professor, Harvard University; domestic policy economist, President Ronald Reagan’s Council of Economic Advisers.
Education: Undergraduate degree from Massachusetts Institute of Technology; doctorate from Harvard.
———-
See Obama’s news briefing
Video of the president-elect announcing his economic team is at chicagotribune.com/obamawgn