Obama names his economic team
Geithner nominated as Treasury chief, Summers picked as director of National Economic Council.
NEW YORK (CNNMoney.com) -- President-elect Barack Obama named key members of his administration's economic team Monday, including New York Federal Reserve President Timothy Geithner as his Treasury Secretary nominee and former Harvard President Lawrence Summers as the director of the National Economic Council.
"I've sought leaders who could offer both sound judgment and fresh thinking, both a depth of experience and a wealth of bold, new ideas, and most of all who share my fundamental belief that we cannot have a thriving Wall Street without a thriving Main Street," Obama said at a press conference Monday in Chicago.
Obama's announcement came hours after the federal government announced a massive rescue package for Citigroup - which President Bush said he'd spoken with Obama about before it was announced.
Mission No. 1 over the next few weeks for Obama's economic team will be hammering out the details of what the president-elect described this weekend as a two-year economic recovery plan intended to create 2.5 million jobs.
Estimates for how much might be spent on a multi-year stimulus package range as high as $500 billion to $700 billion.
At the center of the plan are investments in the nation's roads, bridges, schools and alternative-energy infrastructure.
Obama's top economic team member - his Treasury Secretary - will also be charged with overseeing the dispersal of funds from the controversial $700 billion financial rescue package that Congress passed in October.
Word last week that Obama was likely to nominate Geithner, 47, as his Treasury Secretary sent stocks soaring Friday.
Geithner, highly respected both on Wall Street and in the Capitol's corridors, has already been playing a central role in the Treasury's and Federal Reserve's efforts to stabilize the financial system. His nomination is expected to provide the kind of continuity in the Treasury's financial rescue efforts that will be welcome in the markets and among lawmakers.
Obama described Geithner as having "served with distinction under both Democrats and Republicans and has a long history of working comfortably and as an honest broker on both sides of the aisle."
In a statement issued Monday afternoon, Treasury Secretary Henry Paulson said, "I have the highest regard for Tim --his judgment and creativity have been critical to designing and implementing the necessary actions we've taken to protect and strengthen our financial system. I have great confidence in his understanding of markets, his judgment and leadership, and his ability to meet the challenges that lie ahead."
Bush said Monday morning that Paulson is working closely with the Obama transition team to ensure a seamless transfer.
As the head of Obama's National Economic Council, Summers will coordinate economic policy-making and economic policy advice for the president.
Summers, who turns 54 this month, is considered one of the country's most pre-eminent economists, and he served as Treasury Secretary for two years during the Clinton administration.
"As a thought leader, Larry has urged us to confront the problems of income inequality and the middle-class squeeze, consistently arguing that the key to a strong economy is a strong, vibrant, growing middle class," Obama said of Summers. "This idea is at the core of my own economic philosophy and will be the foundation of all of my economic policies."
Summers is, however, also a controversial economist, whose critics contend he supported positions that helped foster the current financial crisis. They cite, among other things, his support for the Commodity Futures Modernization Act, which allowed many derivatives - such as the credit default swaps that have rocked markets this fall - to go unregulated.
Obama also announced that economist Christina Romer will be director his Council of Economic Advisors, which provides economic analysis and advice to the president.
Romer, whose expertise includes the Great Depression and the economic recovery that followed, is a professor of economics at the University of California, Berkeley. She is also co-director of the monetary economics program and a member of the business cycle dating committee at the National Bureau of Economic Research (NBER), the group that officially determines when U.S. recessions begin and end.
In Romer, Obama said, he has found an independent economist respected by both conservatives and liberals who has done "groundbreaking research on many of the topics our administration will confront, from tax policy to fighting recessions."
Lastly, Obama named Melody Barnes to be the director of his Domestic Policy Council (DPC), which he said will focus in part on healthcare reform as part of his economic recovery plan.
Before joining Obama's transition team, Barnes was executive vice president for policy at the Center for American Progress, where her focus was on policies to help middle-class families. She also served as chief counsel to Sen. Edward Kennedy, D-Mass., on the Senate Judiciary Committee.
"Melody's brilliant legal mind and her long experience working to secure the liberties on which this nation was founded, as well as to secure the opportunities for those who've been left behind, make her a perfect fit for DPC director," Obama said.
Obama's plans to boost the economy aren't likely to be limited to investing in infrastructure and energy initiatives.
Several other measures are expected as well. Among some of the possibilities discussed: direct federal aid to states and cities, tax cuts for low- and middle-income Americans, increased food stamp payments, and a tax credit for businesses that create new jobs in the United States.
Whatever Obama and his economic team ultimately decide to include in the economic recovery package, it's expected that Congress will have the final legislation ready for the president-elect's signature the day he's inaugurated.
Senate Majority Leader Harry Reid, D-Nev. expressed strong support for Obama's appointments and their quest to move quickly on stimulus. "Democrats in Congress share that sense of urgency, which is why we will work quickly to pass a substantial economic recovery package," Reid said in a statement.
House Speaker Nancy Pelosi, D-Calif., made a similar pledge, and stressed that "in this time of economic crisis, bipartisan action is not only in order, it is essential."
But some key Republicans are sending signals that they will not rubber stamp whatever the Obama team and their Democratic supporters in Congress back.
House Minority Leader John Boehner, R-Ohio, in a Washington Post article on Monday said, "Democrats can't seem to stop trying to outbid each other - with the taxpayers' money. We're in tough economic times. Folks are hurting. But the American people know that more Washington spending isn't the answer."
Sen. Jim DeMint, R-S.C., who sits on the Joint Economic Committee, echoed that response.
"I have a lot of respect for President-elect Obama, but growing Washington with runaway spending is not change, it's more of the same. If federal spending actually created economic growth, our economy would be booming right now," DeMint told CNN.
"If the President-elect wants to help the economy recover, he will work with us to reduce taxes and reform the government policies that have been punishing savings, investment and innovation for years," he added.