Chicago Area Local News

CHICAGO (CBS) ― President-elect Barack Obama on Monday morning officially announced key members of his economic team as he warned of the problems being caused by the growing economic crisis.

"Most experts now believe that we could lose millions of jobs next year," Obama said at the somber news conference at the Chicago Hilton and Towers, 57 days before he takes the oath of office.

Well aware that investors around the world were watching his Chicago news conference, and that just a small misstatement might make market indexes plummet, Obama seemed more nervous than we've ever seen, even stumbling a handful of times over words he's used routinely.

Obama was completely at ease, though, as he outlined what he hoped would be the inspiration for every economic policy of his administration.

"The key to a strong economy is a strong, vibrant, growing middle class," Obama said. "This idea is at the core of my own economic philosophy and will be the foundation of all of my economic policies." 

The president-elect said his focus was to ensure that the needs of Main Street were met as well as those of Wall Street.

"Our economy is trapped in a vicious cycle," Mr. Obama said. "Turmoil on Wall Street means another round of belt-tightening on Main Street."

To carry out that plan, Mr. Obama named Timothy Geithner, now president of the Federal Reserve Bank of New York, as Secretary of the Treasury. Geithner also served as the Undersecretary of the Treasury for International Affairs between 1999 and 2001, and also as Policy Development and Review Department director for the International Monetary Fund.

Lawrence H. Summers joins the Obama team as director of the National Economic Council. Summers is now the Charles W. Eliot University Professor at Harvard University, and served as Secretary of the Treasuary from 1999 to 2001 and president of Harvard from 2001 until 2006.

Nominated as the director of the Council of Economic Advisors is Christine D. Romer, the Class of 1957 Professor of Economics at the University of California-Berkeley. Prior to joining the Berkeley faculty in 1988, Romer taught at Princeton University.

Melody C. Barnes was nominated as director of the Domestic Policy council. She has been co-director of the Agency Review Working Group for the Obama-Biden Transition team, and previously was the executive vice president for policy at the Center for American Progress and chief council to U.S. Sen. Edward Kennedy.

Mr. Obama said he intended to introduce a new stimulus package, although he declined to discuss the amount of money that would be required. But he said it needed to be "significant enough that it really gives a jolt to the economy."

Experts have said the plan is likely to far exceed the $175 billion Obama proposed during the campaign. It would include an infusion of money for infrastructure projects, new environmental technologies and tax cuts for low- and middle-income taxpayers. It will not call for tax hikes for the wealthy.

"The economy's gotten substantially worse since (the campaign)," said Austan Goolsbee. "I say it's going to be a number big enough when they spell it out -- it looks like 'ooooh' - with that many zeroes on it.'"

Some economists insist $600 or $700 billion is needed to help the economy. Obama wants to create or save 2.5 million jobs and rebuild the nation's infrastructure and invest in "green" technologies. 

The president-elect reportedly is already working with Democratic leaders in Congress, so he can sign a stimulus package as soon as he takes office on January 20. Democratic congressional leaders said they would get to work when Congress convenes Jan. 6 with bigger Democratic majorities in the House and Senate.

"Clearly we need to have stimulus and help for those - not the big corporations, but those who are struggling with losing their jobs, losing their ability to put food on the table, and losing health care coverage," said House Democrat Rep. Steny Hoyer of Maryland.

In his address Monday, Obama also reiterated his campaign theme that 95 percent of Americans would receive a net tax cut, but the tax cuts on the wealthiest Americans by the Bush Administration would not stand.

"Ninety-five percent of workers get net tax cuts. The reason that's important is not only is that good for families who are struggling, but it's also part and parcel of what we're doing when it comes to stimulus."

However, Obama said: "The Bush tax cuts were disproportionately targeted to the very wealthiest Americans. Those who are making $250,000 a year can afford to pay a little bit more."

He said the decision of whether the Bush tax cuts would be repealed or allowed to expire at the end of 2010 would be "something that my economic team will be providing me a recommendation on." 

Previously, Obama's advisers also indicated that because of the difficult economy, he now may reconsider his campaign pledge to repeal President Bush's tax cut for the families earning more than $250,000 or more a year.

House Republican leader John Boehner of Ohio urged Obama to make that explicit. "Why wouldn't we have the president-elect say, 'I am not going to raise taxes on any American in my first two years in office?'"

Obama also emphasized the need to ensure the auto industry does not "vanish," but said he said "you can't just write a blank check" for the auto industry and criticized auto executives for lacking a specific proposal for how they would use taxpayer money.

The Associated Press contributed to this report.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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