Democrats eye huge economic boost

Nancy Pelosi, Speaker of the House of Representatives
Congressional Democrats hope to pass a plan before Obama takes office

Senior Democrats in the US Congress are considering backing a huge economic stimulus package to try and steer the country clear of recession.

Nancy Pelosi, speaker of the House of Representatives, said economists were suggesting a package worth "several hundred billion" dollars was needed.

During the US election campaign President-elect Barack Obama pledged to pass a $175bn (£118bn) stimulus plan.

Mr Obama is to unveil Timothy Geithner as his treasury secretary on Monday.

Mr Geithner, 47, who currently heads the Federal Reserve Bank of New York, is expected to work alongside Lawrence Summers, a former treasury secretary in the Bill Clinton White House who has also served as president of Harvard University.

'No blank cheque'

Speaking to CBS News on Sunday, Ms Pelosi said any stimulus package should be aimed at creating jobs immediately, and could contain a tax cut.

"Something of several hundred billion would have to be some investment into the future, plus creating jobs immediately, and a tax cut," she said.

Another senior Democrat, New York Senator Charles Schumer, told ABC News that a package of between $500bn and $700bn was needed to overcome the current economic crisis.

The president-elect's new economic team will be charged with revitalising the US economy, which is faltering badly amid the global downturn.

On Saturday, Mr Obama said the economy needed to create 2.5m jobs by 2011.

In a weekly address, he said he wanted to rebuild America's ageing infrastructure, including roads and bridges, as well as develop sources of renewable energy.


KEY APPOINTMENTS
Chief of staff: Rahm Emanuel, a deputy chief of staff to Bill Clinton
Senior advisers: David Axelrod, Valerie Jarrett, Peter Rouse and John Podesta (formerly chief of staff to Bill Clinton)
Press secretary: Robert Gibbs
White House counsel: Greg Craig, formerly special counsel to Bill Clinton
Vice-president's chief of staff: Ron Klain, formerly chief of staff to Al Gore
Staff secretary: Lisa Brown, formerly counsel to Al Gore

Obama's team so far
Profile: Timothy Geithner

David Axelrod, the senior campaign strategist who will become a top presidential advisor in the Obama administration, tacitly admitted that the eventual stimulus plan would come in at more than the $175bn pledged during the election campaign.

The president-elect would do "what's necessary", Mr Axelrod told ABC, adding: "I think we're going to have to do a combination of things to get the economy moving again."

Mr Axelrod also said plans to repeal President George W Bush tax cuts for top earners, another campaign pledge of Mr Obama's, were being reconsidered.

The tax cuts are currently due to expire in 2010, but Mr Obama had promised to roll them back upon taking office.

Mr Axelrod ruled out a "blank cheque" bail-out of struggling auto manufacturers, who saw their requests for federal funding turned down by the outgoing Congress during the week.

They would be asked to return to Congress in December with a plan, not just "an expression of need", he said.

Experience

Discussing the imminent appointment of Mr Geithner, Mr Axelrod described him as the "right man" for the high-profile job.

Timothy Geithner - 24/7/2008
Timothy Geithner has been heavily involved in tackling the credit crisis
"Tim Geithner is someone who had experience in dealing with economic crises as the assistant secretary of treasury for international affairs in the '90s," he said.

"He's intimately involved with the situation now in his role as president of New York Fed [Federal Reserve].

"By temperament and experience, he's the right man to lead the Treasury now," Mr Axelrod added.

Unconfirmed reports naming Mr Geithner first came on Friday, boosting New York shares by 6.5% after days of losses.

Mr Summers is likely to be named as head of the president's National Economic Council, reports have said.

The pair worked together closely at the Treasury during the 1990s, with reports suggesting they have a strong working relationship.