Here's a partial list of what President-elect Obama is expected to do before taking the oath of office on Jan. 20: Craft an economic stimulus bill that can pass muster with the Bush White House. Shape a landmark, $700 billion plan to aid banks, companies and homeowners. Quickly name a Cabinet. Above all, reassure Americans as the economy tumbles toward a potentially deep recession.
Get ready for one of the most important presidential transitions in modern history, as Obama, who won over anxious voters with his calm reserve on economic issues, must now quickly make decisions that will affect businesses and consumers for years to come.
"This president goes into office with more expectations than any president I can ever remember in my lifetime," says House Speaker Nancy Pelosi, D-Calif.
Possibly not since 1932, when Franklin Roosevelt was elected in the midst of the Great Depression, has a change in administration had this economic import. Obama prepares to take office as layoffs surge 80% from a year ago, consumer spending plummets at the fastest pace since 1980, world financial markets are in turmoil and bank failures rise.
Even before Obama won Tuesday and Democrats strengthened their hold on Congress, the financial crisis was forcing Washington officials away from the Republican era of limited regulation and toward more sweeping federal intervention. Economists say the need for government action is increasing as pain spreads from Wall Street to Main Street.
"Since around mid-September, we've seen the economy really hit the skids," says Mike Englund of Action Economics. "Arguably, we are in the middle of the largest financial crisis in history."
Businesses and consumer groups expect Obama's economic team to quickly weigh in as the Bush administration debates how to shape the $700 billion rescue package. Treasury officials have prepared a briefing book for the new president and set aside staff and office space in the department.
Among decisions that could be debated by Treasury and the Obama officials: whether to aid the struggling auto industry, how to help homeowners facing foreclosure and whether to proceed with plans for financial firms to sell troubled assets to the government via an auction process.
"The president-elect doesn't have the traditional 100-day grace period. There is no honeymoon because it is so complex," says Dennis Hedlund, head of iEmergent, a forecasting firm for the mortgage and real estate industry. "Obama has to jump right into the housing issue, because it is closest to day-to-day life of Americans."
Moody's Economy.com chief economist Mark Zandi says Obama must push for Congress to quickly pass a hefty stimulus package of aid to states, public works spending, increased food stamps, extended unemployment benefits and other assistance. Democrats want to debate a bill in a rare lame-duck session this month but may have to delay action until January if they can't get support from Bush and Senate Republicans.
While financial gloom helped propel Obama to the White House, it also creates a paradox for the new president. As revenues fall and deficits balloon, it may be harder for Obama to move on longer-term priorities such as health care.
With the economy likely in recession, raising tax rates — even for the wealthiest Americans — isn't a good idea, says Michael Knoll, a professor of law at the University of Pennsylvania Law School.