Obama Aides: Big Action Needed On Economy

Aides to President Elect Barack Obama are making it clear: standing still on the economy will not be option, some bold move will be needed — and they’ll need to hit the ground running.

As Obama gets ready to announce his economic team, one aide says something big will be needed to steady the economy, and other reports suggest an Obama administration will opt for more tax and spending cuts.

Incoming White House Senior Advisor David Axelrod told ABC News: get ready to see Obama push for a much bigger stimulus package than he suggested during campaign 2008:

This morning, incoming White House senior adviser David Axelrod suggested Obama would push for a much larger package than the $175 billion stimulus he put forth on the campaign trail.

“He wants a plan big enough to deal with the large challenges we face. And I think there’s a growing consensus across the spectrum among economists that we’re going to have to do something big,” Axelrod said in a “This Week” interview with George Stephanopoulos.

“We need to start digging our way out of this hole here or climbing our way out of this hole and stop digging, and that is our objective and that is what we are going to do,” said Axelrod. But Axelrod declined to comment on the cost. “I’m not going to throw a figure out here,” he said.

In response, Sen. Charles Schumer, D-N.Y told ABC that he wants to see a stimulus plan of between $500 and $700 billion. while the Senate Banking Committee’s Sen. Richard Shelby, R-Ala., said Schumer’s stimulus number was much too high. The transcript of the Alexrod interview is HERE. Also: here’s a transcript of Alexrod’s appearance on Fox News Sunday.

Meanwhile, more details of what an Obama administration plans to do are trickling out: it’ll be an administration that seek more spending and tax cuts.

President-elect Barack Obama has signaled that he will pursue a far more ambitious plan of spending and tax cuts than anything he outlined on the campaign trail — a plan “big enough to deal with the huge problem we face,” a top adviser said Sunday — setting the tone for a recovery effort that could absorb and define much of his term.

A member of the Obama economic advisory team, William M. Daley, acknowledged that because of the gravity of the situation, Mr. Obama was leaning toward letting a Bush tax cut for the wealthy expire on schedule in 2011 rather than repealing it sooner.

There were hints Sunday that a stimulus package might be extraordinarily large. Austan Goolsbee, a senior Obama economic adviser, charged that the Bush administration had “dithered” as the economy turned down and suggested that the incoming administration would take dramatic action.

“We’re out with the dithering, we’re in with a bang,” he said on CBS. A senior Democrat, Senator Charles Schumer of New York, said that any package should be as much as $700 billion, equivalent to the recent financial bailout plan.

An increasing fear of experts and some politicians: the transition period. The crisis is perceived now as so grave that the longer there is inaction, the graver the long term — and immediate — risks.

Meanwhile, reports continue to surface suggesting the shape of Obama’s soon-to-be-announced economic team:

Obama went to his daily workout at the gym on Sunday but otherwise stayed out of sight as he prepared for the announcement a 11 a.m. CST (12:00 p.m. EST) on Monday of the people who will lead his administration’s efforts to revive the economy.

The names for the two top jobs became known over the weekend — Timothy Geithner, 47, president of the New York Federal Reserve Bank, as treasury secretary, and Lawrence Summers, 53, a former treasury secretary under President Bill Clinton, as director of the National Economic Council.

The two Clinton-era veterans have worked closely together and command wide respect in financial markets. In fact, when word leaked out about Geithner on Friday, U.S. stock prices rallied more than 6 percent.

In addition, Peter Orszag, director of the Congressional Budget Office, is expected to be tapped soon by Obama as the White House budget director.