President-elect Barack Obama sought to seize the reins of the economic crisis on Monday as he and his new economic team worked closely with President Bush to inject confidence into the trembling financial markets, which rallied throughout the day and erased nearly all of last week’s losses.
The coordination between Obama and Bush was taking place among aides, as well as in direct talks about the rescue plan for Citigroup and unresolved details of the overall Treasury bailout. The president said his successor would be informed of every “big decision” that was made, and he added, “It’s important for the American people to know that there is close cooperation.”
For his part, Obama sought to assure Americans and foreign investors that he was seeking to fill any leadership vacuum and said that his economic advisers would begin working “today.” The Standard & Poor’s 500 stock index rose 6.4 percent and the Dow Jones industrials jumped 4.9 percent, reprising the upswing on Friday.
As if to underscore the transfer of power under way, Obama introduced his new economic team at a news conference here shortly after Bush made brief remarks outside the Treasury Department. The president-elect confirmed that he would nominate Timothy F. Geithner as Treasury secretary, an experienced hand who played a large role in the rescue plan for Citigroup.
Obama expressed support for the Citigroup plan and urged Congress to adopt swiftly a major plan to stimulate spending and to reverse job losses.
“The news this past week, including this morning’s news about Citigroup,” Obama said, “has made it even more clear that we are facing an economic crisis of historic proportions. If we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year.”
Democratic leaders in Congress are gearing up to move quickly on an economic recovery package that aides said could cost more than $500 billion. The goal is to have a legislative package approved by the House and the Senate and ready for Obama to sign, perhaps on his first day in office, Jan. 20.
“We have to make sure that the stimulus is significant enough that it really gives a jolt to the economy,” Obama said.
The president-elect declined to estimate the size or scope of such legislation, but he said, “We are going to do what’s required.”
In addition to Geithner as Treasury secretary, Obama also named a former Treasury secretary, Lawrence H. Summers, to head the White House Economic Council and described Summers’ experience as essential to “navigate the uncharted waters of this economic crisis.”
The selections of Geithner, who is president of the Federal Reserve Bank in New York, and Summers, a Harvard economist, signaled that Obama intended pursue aggressive, yet centrist policies, in finding ways to help jump-start the economy.
Over the next four weeks, Obama intends to announce most of his Cabinet.