An Economic Transition, A Political Dance
Obama and Bush Navigate the Uncharted Waters of Fixing Economy During Transition
By THERESA COOK and KATE BARRETT
Nov. 25, 2008—
One of them needs to assure the American people that he's still in charge of navigating a massive financial crisis during his final months in office. The other needs to convey that he's gearing up to help fix it while making sure he's not technically calling the shots.
A transition from a Republican administration to a Democratic one is already a fragile dance, but even more so when the nation's economy needs an immediate pick-me-up at the exact same time.
"What you're going to see in the next 48 hours is a continuity," Peter Morici, a business professor at the University of Maryland, told ABCNews.com. "We're going to really learn that the Obama administration and the Bush administration are not much different when it comes to banking policy and economy policy."
Both President-elect Barack Obama and outgoing Treasury Secretary Henry Paulson plan to speak Tuesday about the nation's finances. Both President Bush and Obama also spoke publicly Monday to assuage concerns over the deepening economic crisis, and pledge cooperation during the presidential transition.
"I've asked my economic team to develop recommendations for this plan and to consult with Congress, the current administration, and the Federal Reserve on immediate economic developments over the next two months," Obama said at a Monday press conference set up to introduce his economic team.
"I've requested that they brief me on these matters on a daily basis," Obama continued.
Speaking on the steps of the Treasury Department Monday alongside Paulson, Bush, too, said the incoming and outgoing administrations are working together. He said he'd talked to Obama about the government's rescue of Citigroup.
"I told the American people and I told the president-elect when I first met him that anytime we were to make a big decision during this transition, he will be informed, as will his team," Bush said. "Secretary Paulson's working closely with the president-elect's transition team, and it's important for the American people to know that there is close cooperation."
"I don't think he wants to be seen as trying to upstage Obama, so I would assume this was coordinated," Dean Baker, co-director of the Center for Economics and Policy Research, told ABCNews.com.
Can a New Party Do Anything Differently?
But keeping up the appearance that the transition is going smoothly, while at the same time, promising major change, is a challenge for Obama's team.
Though Obama expressed optimism for economic recovery, he also declined to discuss specifics of his incoming administration's stimulus package or to take a solid stance on current tax cuts put in place by Bush. Obama said he'd wait for the recommendation of his newly-assembled economic team.
To lead that team, Obama Monday introduced Timothy Geithner as his treasury secretary nominee and Larry Summers, who would be director of the National Economic Council. Obama championed their experience and ability to take a new look at the economic crisis.
"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 without a thriving Main Street," Obama said.
Still, some economists said that, given those picks, Americans should not expect significant change. Summers served as treasury secretary under President Clinton. Geithner is head of the New York Federal Reserve and a close ally of Wall Street.
"They kind of have their hands in the middle of this," Baker said. "This group of people does bear some responsibility for the mess we're in."
"We certainly need an administration that has the independence from Wall Street to really rein them in," he added.
Morici, too, was skeptical of those selections.
"There's really going to be no changes at Treasury," Morici said.
"With Geithner and Summers, he's going to get thinking that's truly inside the box."
William Kristol, founder and editor of The Weekly Standard, wrote in Monday's New York Times that Obama's picks are "sober and competent people who know we face a real crisis — and who, importantly, may be more willing than many of their colleagues to adjust their thinking early and often.
"I hope the best and the brightest who will be joining the new president will at least entertain the possibility that a lot of what they think they know is wrong," Kristol added.
Obama's Economic Dream Team
On Monday, outgoing Treasury Secretary Paulson praised Obama's pick for his replacement.
"I have the highest regard for Tim -- his judgment and creativity have been critical to designing and implementing the necessary actions we've taken to protect and strengthen our financial system," Paulson said in a statement.
According to a new ABC News poll, 67 percent approve of Obama's work on the transition, but a smaller 44 percent think Obama will be able to improve the economy significantly.
When the new team does take office, ABC News' George Stephanopoulos reported Monday that the president-elect's advisors are hashing out a package in the neighborhood of $500 to $700 billion. Stephanopoulos also reported that Obama will likely allow the Bush tax cuts to sunset in 2010 instead of taking aggressive action towards repealing them.
Obama said Monday that he wants the new Congress to dive into an "aggressive economic recovery plan" so his administration can "hit the ground running" after his Jan. 20 inauguration.