Politics

CHICAGO (CBS) ― President-elect Barack Obama pledged on Wednesday to have an economic plan ready for action to deal with the nation's financial crisis on his first day in office. "Help is on the way," he declared. Obama also announced that former Fed Chairman Paul Volcker would head a panel to help create jobs and bring stability to the financial system. 

He also said his Cabinet would "combine experience with fresh thinking" and pushed back against criticism that he was recycling former Clinton administration officials as he builds his new economic team.

Volcker, 81, will head the President's Economic Recovery Advisory Board. Obama adviser Austan Goolsbee will be the staff director, in addition to his role on the White House Council of Economic Advisers, Obama announced Wednesday morning at the Chicago Hilton & Towers, 720 S. Michigan Ave.

Volcker is a legendary central banker who raised interest rates and restricted the money supply to tame raging inflation in the 1980s. It was a painful prescription that helped send the economy into one of the nation's worst recessions.

"He pulls no punches," Obama said of Volcker. "He seems to be fairly opinionated."

The board is modeled on the Foreign Intelligence Advisory Board founded by President Dwight D. Eisenhower, and will be composed of people in business, labor, academia and other areas, Obama said.

He said it was necessary to put together a board composed of people outside government.

"The reality is that sometimes policymaking in Washington can become a little bit too ingrown and a little bit too insular. The walls of the echo chamber sometimes keep out fresh voices and new ways of thinking. We start engaging in groupthink," Obama said, "and those who serve in Washington don't always have a ground-level sense of which programs and policies are working for people and businesses, and which aren't. This board will provide that fresh perspective to me and my administration." 

Fifty-five days before his inauguration, Obama also defended his selection of former Clinton officials to help run his administration.

"The American people would be troubled if I selected a treasury secretary or a chairman of the National Economic Council at one of the most critical economic times in our history who had no experience in government whatsoever," Obama said.

"What we are going to do is combine experience with fresh thinking," he said. "But understand where the vision for change comes from. First and foremost, it comes from me. That's my job, is to provide a vision in terms of where we are going and to make sure then that my team is implementing." 

Obama encouraged Americans to be hopeful in a time of economic crisis.

"People should understand that help is on the way, and as they think about this Thanksgiving shopping weekend, as they think about the Christmas season coming up, I hope that everybody understands that we will be able to get through these difficult times," Obama said. "We're just going to have to make some new choices."

He added, "We continue to be in possession of extraordinary resources that if we harness them properly, we'll get the economy moving in the next couple of years."

But as Obama spoke, there was unrelenting bad news on the economy's current state.

The government reported that jobless claims remained at recessionary levels, consumers had cut back on their spending by the largest amount since the 2001 terrorist attacks, orders to U.S. factories had plunged anew and home sales had fallen to the lowest level in nearly 18 years.

Obama said he will announce the remaining members of his new economic panel in the coming weeks. He already has named Congressional Budget Office Director Peter Orszag as his candidate to run the White House Office of Management and Budget and New York Federal Reserve President Tim Geithner as his treasury secretary.

Geithner was a Treasury Department official during the Clinton administration, and Lawrence Summers, who will head Obama's National Economic Council, was Clinton's treasury secretary. Other Clinton administration names include Eric Holder, who will be Obama's attorney general, and Rahm Emanuel, the president-elect's chief of staff.

Obama said he wants the new economic panel to provide outside voices for his administration.

"The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking," Obama said. "You start engaging in group-think."

His economic team largely complete, Obama is expected to introduce national security officials next week, including Hillary Rodham Clinton as his secretary of state. He is expected to announce he has asked Defense Secretary Robert Gates to remain at the Pentagon for a year. James Jones, a former Marine Corps commandant and NATO commander, is Obama's pick to be national security adviser.

Obama said his new economic panel "will bring to bear their wisdom and expertise on the formulation, implementation and evaluation of my administration's economic recovery plan."

"I hope that everybody understands that we are going to be able to get through these difficult times, but we're just going to have to make some good choices," Obama said. "I was elected with the charge of getting this economy back in shape but also making sure that it's working on behalf of middle-class families."

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)