Obama warns economy likely to get worse

CHICAGO - President-elect Barack Obama on Monday unveiled his economic team and warned that "the economy is likely to get worse before it gets better." 

"I've sought leaders who could offer both sound judgment and fresh thinking, both a depth of experience and a wealth of bold new ideas — and most of all, who share my fundamental belief that we cannot have a thriving Wall Street while Main Street suffers," Obama told reporters.

Obama said that recent news "has made it even more clear that we are facing an economic crisis of historic proportions." Offering a grim prediction, he added, that "most experts now believe that we could lose millions of jobs next year."

He declined to say how big a spending package he wants to revive the economy, adding that he was awaiting a recommendation from his economic team. Some Democratic lawmakers are speculating about a two-year measure as large as $700 billion. Obama would only say that "it's going to be costly."

The president-elect was mildly critical of the Big Three automakers, saying he was surprised they did not have "a better thought out proposal" for their future before asking Congress to approve $25 billion in emergency loans.

He added that once he sees a plan, he expects "we're going to be able to shape a rescue."

Five team members named
As expected, the president-elect named Timothy Geithner, the New York Federal Reserve president, as his treasury secretary. Wall Street stocks jumped on Friday when word of Geithner's appointment began to leak.

Geithner, 47, will team with Lawrence Summers, a treasury secretary under former President Bill Clinton and former Harvard University president, who will take over the National Economic Council.

Obama also named three others on his economic team:

• Christina Romer as director of the Council of Economic Advisers. Romer is a U.C. Berkeley professor of economics, and co-director of monetary economics at the National Bureau of Economic Research.
• Melody Barnes as director of the Domestic Policy Council. She has been co-director of the Agency Review Working Group for the Obama transition team, and also served as the senior domestic policy advisor to Obama during the campaign. Barnes previously worked at the Center for American Progress and as chief counsel to Sen. Ted Kennedy.
• Heather Higginbottom as deputy director of the Domestic Policy Council. She was Obama's policy director during the campaign and earlier served as Sen. John Kerry's legislative director.

Video   'Big stimulus' Nov. 24: President-elect Barack Obama explains his plans. Nightly News

Democratic officials also said Obama plans to name New Mexico Gov. Bill Richardson as commerce secretary, adding a prominent Hispanic and one-time Democratic presidential rival to his Cabinet. Richardson served as U.N. ambassador in the Clinton administration and later as energy secretary.

Obama spoke against a backdrop of increasing calls for him to assert himself well before he takes office Jan. 20 in the midst of the most severe U.S. financial crisis in eight decades.

In the latest bailout, the U.S. government announced late Sunday it had agreed to shoulder hundreds of billions of dollars in possible losses at the banking giant Citigroup, and to put a fresh $20 billion into the stricken company.

What's ahead?
Obama's team will confront an economic crisis that continues to deepen in spite of hundreds of billions of dollars in federal emergency spending in recent weeks.

"The stakes are high," said Julian Zelizer, professor of history and public affairs at Princeton University. "This is a really dangerous moment ... for the economy. It’s almost as if no one’s in control. Now people are looking to (Obama) to find out at least what’s going to happen in the next few months, if not the next few weeks."

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