- The Washington Times - Thursday, December 18, 2008

President-elect Barack Obama is floating the possibility of an economic-stimulus package as large as $1 trillion, making good on private comments by his staff to supporters that they are prepared to take the political heat for a dramatic rise in the federal deficit.

Mr. Obama carefully has sidestepped repeated questions about the size of his stimulus package, telling reporters and interviewers only that he wants it to be “large enough to get the economy moving.”

The Democrat has said the package should create or save 2.5 million jobs, with a focus on infrastructure projects and rehabilitating the nation’s schools.

On Wednesday, the Obama transition team confirmed an Associated Press report that the president-elect is contemplating, but has not settled on, an economic-recovery plan that could cost as much as $1 trillion over two years.

Also on Wednesday, a senior Democratic official confirmed that Mr. Obama will nominate retiring Republican Rep. Ray LaHood of Illinois to be transportation secretary, and the AP reported that Mr. Obama had chosen Mary Schapiro, a securities industry regulator with extensive experience in Washington, to be chairwoman of the Securities and Exchange Commission.



Several Obama advisers did not respond to requests for further comment on the planned stimulus proposal.

Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees, told The Washington Times on Wednesday that when labor leaders met with the transition team last month, Mr. Obama’s staff was ready for criticism over a large deficit number.

Mr. McEntee said the Obama team is well aware that President Clinton faced the prospect of deepening deficits when he took office in 1993 and ended up backing off some of his campaign proposals. He said he believes the incoming administration has concluded it can’t let that happen again.

“They are well aware of that experience, in the statements I listen to, they’re prepared to face that,” Mr. McEntee said. “They’re prepared to face a media blitz they would expect in regards to the deficit and the size of it.”

Stephen Ellis, vice president of Taxpayers for Common Sense, said Mr. Obama must have concrete goals to justify such spending, regardless of the figure.

“Whether a stimulus works or not is as much or more about what you spend it on as how much you spend,” he said. “If you dig a deep budget hole, you better be sure that the economy gets its money’s worth.”

Should the $1 trillion figure over two years turn out to be true, it would rival the largest line item in the federal budget, defense spending for fiscal year 2009 with a $515 billion price tag.

Initially, Democrats said the stimulus would be more in the $500 billion to $600 billion ballpark, a sum that even then drew ire from fiscal conservatives already worried about the $700 billion Wall Street bailout Congress passed this fall.

The economic team thought a $600 billion package would meet the jobs goal but still leave an 8 percent unemployment rate by 2011, so they believe an $850 billion package would meet the jobs goal and lower unemployment at a faster clip, the AP reported.

The AP reported that Harvard professor Martin Feldstein, former chairman of the Council of Economic Advisors under President Reagan, who had advised Mr. Obama’s Republican presidential rival, Sen. John McCain, said he recommended $800 billion in total.

“I do recommend $400 billion in year one, and expect a similar amount in year two,” Mr. Feldstein said in an e-mail message to the AP. “The right amount depends on how it is used.”

Earlier this month, Mr. Obama said on NBC’s “Meet the Press” that his economic team is “crunching the numbers” to craft a substantial stimulus package.

He said he knows he is inheriting a deficit that could top $1 trillion before his plans go into effect, but “we understand that we’ve got to provide a blood infusion to the patient right now to make sure that the patient is stabilized, and that means that we can’t worry short-term about the deficit.”

Mr. Obama’s economic team huddled in Chicago on Tuesday to discuss the stimulus and other proposals they will work to pass when he takes office Jan. 20.

On Wednesday, Mr. Obama named two Cabinet secretaries who will be tasked with preserving the nation’s resources, creating new “green” jobs and helping rural America.

He nominated Sen. Ken Salazar of Colorado as secretary of the interior and former Iowa Gov. Tom Vilsack as agriculture secretary.

“They will serve as guardians of the American landscape,” Mr. Obama told reporters in Chicago.

He talked about the need to develop “advanced biofuels” for energy independence and use natural resources to create new jobs and fight climate change.

Mr. Obama said that Mr. Vilsack “understands the solution to our energy crisis will be found not in oil fields abroad, but in our farm fields here at home.”

Mr. Salazar, a farmer and rancher who sported a cowboy hat during the press conference, said he was excited to join Mr. Obama “as we take the moon shot on energy independence.”

Mr. Obama told reporters it is tough to hold off on releasing the transition team’s internal report about its interactions with embattled Illinois Gov. Rod R. Blagojevich.

“It’s a little bit frustrating,” Mr. Obama said in response to a question. “There’s been a lot of speculation in the press that I would love to correct immediately.”

The report is scheduled to be released some time next week at the request of authorities.

• Stephen Dinan contributed to this report.

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