Obama's first step: a stimulus package
With fresh evidence that the U.S. economy is shedding jobs even faster than expected, President-elect Barack Obama said Friday his top concern is passage of a multibillion-dollar stimulus package to create jobs.
The Washington Post
The jobless rate surged to a 14-year high of 6.5 percent in October.
About 10.1 million people were unemployed in October, the most since fall 1983. About 1.2 million positions have been cut this year, more than half in the past three months.
The government revised job statistics for August and September, saying job losses were worse than first reported: 284,000 rather than 159,000 in September and 127,000 rather than 73,000 in August.
General Motors said it lost $2.5 billion in the third quarter and warned it could run out of cash in 2009 as it struggles with poor sales. Ford said it lost $129 million but was helped by a $2 billion gain. It burned through $7.7 billion in cash over three months.
Source: Seattle Times news services
Third-quarter loss for General Motors
Third-quarter loss for Ford
Cash spent by GM and Ford in the past three months
WASHINGTON — With fresh evidence that the U.S. economy is shedding jobs even faster than expected, President-elect Barack Obama said Friday his top concern is passage of a multibillion-dollar stimulus package to create jobs.
In his first news conference since winning the presidency, Obama said he would tackle the nation's financial crisis "head-on" and called on Congress and the White House to approve a stalled stimulus plan that could include money for new public-works projects and aid for the nation's teetering automakers.
If it does not get passed soon, he said, "it will be the first thing I get done as president of the United States."
His remarks followed a meeting in Chicago of his top economic advisers and a spate of dire news on the economy.
The government said 240,000 jobs were lost in October and the unemployment rate surged to 6.5 percent, its highest level since 1994. GM and Ford reported massive losses for the third quarter and warned that they need government aid because if the economic situation fails to improve, they run the risk of not having enough cash to operate.
"Tens of millions of families are struggling to figure out how to pay the bills and stay in their homes," Obama said, standing before a row of economic luminaries such as former Treasury Secretary Robert Rubin and former Federal Reserve Chairman Paul Volcker.
"Their stories are an urgent reminder that we are facing the greatest economic challenge of our lifetime, and we're going to have to act swiftly to resolve it."
Call to set aside politics
The president-elect called on members of both parties to "set politics aside for a while" to deal with the economic crisis. Yet politics continued in Washington, D.C., as congressional Democrats and the Bush administration clashed over the stimulus package and free-trade agreements.
Bush administration officials signaled Friday they are likely to oppose stimulus proposals from Democrats, saying that the ideas mentioned so far would have little immediate impact and that the $700 billion rescue plan approved last month needs more time to play out.
The outlines of the Democrats' stimulus plan are similar to the version the House approved Sept. 26, providing a 13-week extension of unemployment benefits, increased funding for food stamps, infrastructure projects and to states for Medicaid costs.
Also on the table is a proposal to double the $25 billion in low-interest loans to automakers to produce more fuel-efficient vehicles.
Speaking before Obama's news conference, White House spokesman Tony Fratto said the administration would review any legislation but the stimulus proposals floated by Democrats are "very limited and very forward-looking and long-range," such as large-scale public-infrastructure projects that could take years to complete.
Fratto also dismissed proposals for another extension of unemployment benefits, noting that one extension had been approved and some states can extend benefits further with federal matching funds.
Issuing a threat to the Bush administration, House Majority Leader Steny Hoyer, D-Md., said Democrats were prepared to forgo a planned lame-duck congressional session unless President Bush commits to a compromise stimulus bill.
"We still don't have any agreement," Hoyer said. "Clearly there's no point in us doing something if the administration is going to take the position that they're not going to sign something."
Leaving Congress shuttered would close the door on Bush's legislative accomplishments, a particular blow to his free-trade agenda as the long-sought pact with Colombia awaits House and Senate approval.
Democrats could wait until the new administration takes office in January to pass a stimulus package. Friday, Obama said he wanted to see the measure pass "sooner rather than later."
He said he would review how the Treasury Department is implementing its plan to spend $700 billion to rescue the financial markets, including whether bank executives receiving government help are being unduly rewarded.
He added he would move with "all deliberate haste" to make appointments and order his transitional economic team to work on additional options to aid automakers.
Gesture of respect
Arriving for his first meeting with reporters since being elected, Obama said, "Oh, wow," as he walked into a basement ballroom in the Hilton Chicago, expressing surprise at the tradition of reporters standing when a president or president-elect walks into a room. He laughed. "Thank you very much, everybody," he said. "Thank you very much."
He was flanked by Sen. Joseph Biden, the soon-to-be vice president, and Rep. Rahm Emanuel, the Chicago congressman who will be the White House chief of staff. He also brought with him a football team's worth of economic advisers, the group he had met with earlier.
Addressing issues as varied as Iran and his family's search for a suitable dog for the White House, he took care to thank Bush for his warm remarks upon his election, and to pledge that he would do nothing between now and Jan. 20 to undercut the departing chief executive.
"We only have one president at a time," he said.
He was cool and cautious when he was asked whether he had responded to a letter from President Mahmoud Ahmadinejad, of Iran, that marked the first time since the Iranian revolution that a leader in Iran had congratulated a U.S. election winner.
"I will be reviewing the letter," he said, "and we will respond appropriately."
Near the end of the session, he alluded to a domestic choice facing his family: what kind of dog to bring to the White House. Perhaps, he said, the Obama family should visit a shelter and pick out "a mutt like me."
Information from The New York Times and Chicago Tribune
is included in this report.
|The economic advisers|
|Members of President-elect Obama's Transition Economic Advisory Board, as provided by Obama's office:|
|David Bonior||Former Democratic congressman from Michigan|
|Warren Buffett||Chairman and CEO of Berkshire Hathaway|
|Roel Campos||Former SEC commissioner|
|William Daley||Former commerce secretary|
|William Donaldson||Former chairman of the SEC|
|Roger Ferguson||Former vice chairman of the Fed's board of governors|
|Jennifer Granholm||Michigan governor|
|Anne Mulcahy||Chairman and CEO of Xerox|
|Richard Parsons||Chairman of the board for Time Warner|
|Penny Pritzker||Chairman and founder of Classic Residence by Hyatt|
|Robert Reich||Former Labor secretary|
|Robert Rubin||Former Treasury secretary|
|Eric Schmidt||Chairman and CEO of Google|
|Lawrence Summers||Former Treasury secretary|
|Laura Tyson||Former head of Council of Economic Advisers under Clinton|
|Antonio Villaraigosa||Los Angeles mayor|
|Paul Volcker||Former Federal Reserve chairman|
|Source: The Associated Press|
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