Obama presses plans for economic recovery

United States president-elect Barack Obama will press his aggressive plans to deal with his nation’s woes on Wednesday in his third press conference in as many days focused on the stricken US economy.

Obama is also expected to round out his economic appointments at the briefing, which comes after the Federal Reserve said it would pump an extra $800-billion into the economy to stabilise the US financial system.

Unusually for a president-elect, Obama is publicising his economic agenda well in advance of taking office in a bid to reassure jittery investors around the world.

Obama, who will be inaugurated on January 20, said he was not trampling on President George Bush’s authority but insisted the economic emergency demanded that he present a clear sense of direction for the future.

“I think it’s important, given the uncertainty in the markets and given the very legitimate anxiety that the American people are feeling, that they know that their new president has a plan and is going to act swiftly and boldly,” he said Tuesday.

“We don’t intend to stumble into the next administration. We are going to hit the ground running.”

Obama vowed to erase wasteful spending from the deficit-ridden US budget on Tuesday after urging Congress a day earlier to get working on a new stimulus package “right away” and warning there is not a “minute to waste”.

Obama acknowledged on Tuesday that his plans to inject billions of dollars in stimulus spending would drive the deficit still higher — it could approach a staggering $2-trillion in his first year in office.

But he stressed the long-term benefits of investment in crumbling US infrastructure and healthcare systems.

“If we are going to make the investments we need, we also have to be willing to shed the spending that we don’t need,” the president-elect told his second news conference.

Obama said his immediate plans to create 2,5-million jobs through an infrastructure spending spree will require a heavy outlay — reportedly as much as $700-billion.

“But as soon as the recovery is well under way, then we’ve got to set up a long-term plan to reduce the structural deficit and make sure that we’re not leaving a mountain of debt for the next generation,” he said.

“We can’t sustain a system that bleeds billions of taxpayer dollars on programmes that have outlived their usefulness or exist solely because of the power of politicians, lobbyists, or interest groups.”

The US government closed its books on the 2008 fiscal year September 30 with a record deficit of $455-billion, and many analysts say the current fiscal year will end with a whopping gap of $1-trillion.

The economy is staring at recession after contracting by 0,5% in the last quarter, according to the latest government data.

Obama has pledged to honour Bush’s far-reaching market interventions but at the same time is issuing veiled criticisms of the outgoing president’s piecemeal approach as he vows a coordinated plan of action for the economy.

On Tuesday, he said “I don’t think that there’s any question that we have a mandate to move the country in a new direction and not continue the same old practices that have gotten us into the fix that we’re in.”

Obama’s economic team has already begun work on developing recommendations to take to Congress, the White House and the Federal Reserve in the coming weeks.

Obama is, meanwhile, expected next week to fill out his national security posts and select a secretary of state — with former Democratic rival Hillary Clinton hotly tipped to serve as top diplomat.

Defence Secretary Robert Gates has reportedly agreed to stay in his job at least for Obama’s first year as president and execute the Democrat’s signature policy of withdrawal from Iraq. — AFP

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