Obama likely to make early mark on economy

John W. Schoen Senior producer • Profile • E-mail

And now, let the lobbying begin.

Although the inauguration is nearly three months away, President-elect Barack Obama and his team already are hard at work on plans to address the rapidly deteriorating economy and continue repairing the battered financial sector.

Financial services, housing, energy and the auto industry are among the biggest sectors of the economy whose executives will be hoping — and lobbying — to benefit early in the new administration.

Among the most pressing problems is the rapid contraction of the auto industry, as sales have collapsed amid the credit crunch, deepening economic slowdown and sharp pullback in consumer spending. Obama is expected to meet in the next few weeks with the CEOs of General Motors, Ford and Chrysler to try to shore up the industry’s finances and head off the potential loss of millions of industry-related jobs.

Although financial markets have stabilized somewhat, and the credit freeze has begun to thaw, the repair of the financial services industry will be another pressing concern for the Obama administration. Given the sweeping powers Congress granted the Treasury under the $700 billion financial industry bailout bill last month, the beneficiaries could be broad-ranging.

Details of the plan are still taking shape and "there is little clarity" about major components of the program, Daniel Tenengauzer, head of global currencies strategy at Merrill Lynch, said in a note to clients Wednesday.

Another area likely to get attention early in the Obama administration is the energy sector. Obama has proposed spending $150 billion over 10 years to develop alternative energy sources including wind, solar and ethanol.

"It may not all be corn-based ethanol," said Christine Tezak, an analyst with the Stanford Group. "But a big component of Obama's goal is to bolster our domestic security by fostering fuels. And that includes renewables like ethanols, whether from corn or whether from cellulose."

Obama might not be as friendly to the nuclear industry. Although the Bush administration worked hard to jump-start a “renaissance” in construction of nuclear power plants, a plan enthusiastically supported by Sen. John McCain in his losing campaign, the Obama campaign has been lukewarm on nuclear, citing the problems of waste disposal and proliferation.

“He's tepid on nuclear,” said Branko Terzic, a former member of the Federal Energy Regulatory Commission and now a consultant with Deloitte. “He said he's waiting for the scientific evidence on waste disposal and some other issues. So I don't think nuclear will be a high priority in the Obama administration.”

Big Oil producers and refiners may face the loss of tax incentives that were a cornerstone of the Bush administration’s energy policy. This year's spike in energy prices prompted Obama to propose forcing oil companies to set aside a “reasonable share of their record-breaking windfall profits” to help consumers pay for gasoline. But it remains to be seen whether Congress would go along with the idea.

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