Obama urges Congress to pass costly stimulus bill
CHICAGO – Citing an “economic crisis of historic proportions,” President-elect Barack Obama urged Congress to pass a costly, job-creating stimulus bill as quickly as possible, a rare pre-inaugural call to action delivered as the outgoing Bush administration approved fresh billions to bail out one of the nation’s largest banks.
Stock prices surged — the biggest two-day percentage gain for the Dow Jones industrials in 21 years — as investors took heart Monday from the actions and words of the incoming and departing chief executives.
“If we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year,” said Obama, 57 days shy of taking office in the shadow of the worst economic crisis since the Great Depression.
He blended criticism of Detroit’s beleaguered Big Three automakers — General Motors Corp., Ford Motor Co. and Chrysler LLC — with a pledge of support for government aid to help them survive. “We can’t allow the auto industry to … vanish,” he said, although he added that a blank check for an industry resistant to change was not the solution to its long-term decline.
At a news conference in which he introduced New York Federal Reserve President Timothy Geithner as his treasury secretary and named other top economic officials, Obama said restoring the economy to health took priority over deficit concerns. Still, he said he would be looking for “meaningful cuts and sacrifices” to restrain federal spending. The president-elect was expected to stress that pledge at a second news conference on Tuesday. Democratic officials said he intended to name Peter Orszag, currently the head of the Congressional Budget Office, to be his budget director.
Obama and President George W. Bush spoke by telephone during the day, their first disclosed conversation since a visit at the White House more than a week ago, and each man appeared eager to show a transition proceeding smoothly.
At the same time, the juxtaposition of the outgoing and incoming chief executives grappling — publicly and simultaneously — with the economy underscored the severity of a crisis that has sent joblessness rising, caused a large spike in mortgage foreclosures and crippled the credit markets.
Bush said his administration’s dramatic overnight rescue of Citigroup Inc. was necessary to safeguard the nation’s financial system and help the economy recover. He said more such moves might follow if other institutions need help. Officials said the government might invest $20 billion in the firm, and guarantee $306 billion in risky assets.
Encouraged by the action, investors sent the Dow Jones industrials up 397 points. Coupled with Friday’s gain, that mean an 891 point increase over two trading days, the biggest percentage rise since October 1987.
Obama made a point of saying his administration “will honor the public commitments made by the current administration to address this crisis,” words of reassurance to the financial markets..