- The Washington Times - Monday, November 24, 2008

UPDATED:

CHICAGO (AP) – President-elect Barack Obama tapped New York Federal Reserve President Tim Geithner as his treasury secretary on Monday, turning to a veteran of financial crises at home and overseas to lead the rescue of the nation’s swooning economy.

At a news conference 57 days days before his inauguration, Obama also chose Lawrence Summers as director of his National Economic Council. Summers was treasury secretary under former President Bill Clinton.

Obama said that recent news “has made it even more clear that we are facing an economic crisis of historic proportions.” Offering a grim prediction, he added, “Most experts now believe that we could lose millions of jobs next year.”

He said his newly minted economic aides offered “sound judgment and fresh thinking” at a time of economic peril.

Mr. Obama and Vice President-elect Joseph R. Biden Jr. will hold a news conference in Chicago, hoping the announcement will ease Americans’ economic woes and potentially continue the market rally from Friday when news leaked Mr. Geithner is the choice to lead Treasury through the crisis.

Former Treasury Secretary Lawrence H. Summers will help shape White House policy as director of the National Economic Council while Mr. Geithner, now president of the New York Federal Reserve Bank, will be responsible for managing the Wall Street bailout he helped to engineer this fall.

The news conference will mark the first announcement of a Cabinet member, though several names have leaked out and have been confirmed.

With this team in place and following the Thanksgiving holiday, Mr. Obama’s transition team will roll out more high profile Cabinet posts, including Sen. Hillary Rodham Clinton as secretary of state.

Obama chief strategist David Axelrod, who in January will assume a senior White House adviser role, said Sunday that Mrs. Clinton and the other Cabinet members “are not going to be potted plants in their departments.”

“They are going to be partners with him in governance, and he is going to encourage that,” he said on ABC’s “This Week.”

“There’s one person who’s going to be in charge of American foreign policy, and there’s one person who’s going to be in charge of American economic policy. And that’s Barack Obama,” Mr. Axelrod said.

Mr. Axelrod said that the president-elect and his transition team were heartened by the 494-point Dow rally Friday afternoon following the first reports about the new treasury leader.

“He is the sort of person you want when you’re facing the kind of economic crisis we have today,” Mr. Axelrod said of Mr. Geithner. “He’s someone who is steeped in the economy and in managing crises … and he’s someone who, by both temperament and experience, is well suited for the times we’re in. And we were gratified by the reaction to news of his pending appointment.”

He predicted the Summers announcement would “give the markets a whole lot of assurance” as well.

Mr. Geithner has been involved in working with Congress to craft the Wall Street bailout package and Mr. Axelrod hailed him as someone who “was an early warning system in terms of the need for greater regulation, and has been ahead of the curve on a lot of these issues.”

Sen. Charles E. Schumer, also on “This Week,” said Mr. Geithner is a “great choice,” and added he is glad that Mr. Summers will be named as director of the National Economic Council and will have a major role in the White House’s economic policy.

“These are brilliant people, two of the best. When you have an economic problem or issue, you call them; you get incisive answers,” said Mr. Schumer, New York Democrat.

Sen. Richard C. Shelby, Alabama Republican, called Mr. Geithner, 47, “innovative” and “up to the challenge.”

“He knows a lot about the economy and he knows a lot about problems, but he is a breath of fresh air, so to speak,” he said.

The Monday news conference, scheduled for noon EST at a Chicago hotel, follows Mr. Obama’s weekly radio address. He also is expected to renew his promise to pass a second stimulus package, perhaps much larger than initially suggested.

Mr. Axelrod refused to put a size on the stimulus package his boss will want, but Mr. Schumer said it would need to be between $500 billion and $700 billion.

“It’s going to be a number big enough that when they spell it out it looks like ‘ooh,’ you know, with that many zeroes on it,” Obama economic adviser Austan Goolsbee said on CBS’ “Face the Nation.” He noted the $175 billion stimulus his boss proposed on the campaign trail but said bigger action is needed to “startle the thing into submission.”

The stimulus was a frequent topic on the Sunday shows.

House Speaker Nancy Pelosi on “Face the Nation” also would not assign a dollar figure to a new plan, but said, “The sooner we do one, the smaller it can be.”

Former Treasury Secretary William Daley said Sunday on NBC’s “Meet the Press” that Mr. Obama is “intent” on his jobs creation plan being swiftly moved through Congress. He said it is “more likely than not” that Mr. Obama would delay his plans to raise taxes on the wealthy until 2011 when the Bush tax cuts are set to expire.

That’s what House Minority Leader John A. Boehner, Ohio Republican, called for on “Fox News Sunday.”

“If we really want to help the economy, why wouldn’t we have the President-elect say, ‘I’m not going to raise taxes on any American my first two years in office,’ ” Mr. Boehner said.

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