Obama: 'Striking' need for economic jolt

(NICHOLAS KAMM/AFP/Getty)

President-elect Barack Obama, in unveiling the final members of his Cabinet today, issued another sobering warning about the American economy, saying it was "striking" how economists of all stripes agree on the necessity of a major infusion of deficit spending by the federal government.

Obama again said the economy will get worse before it gets better, and that recovery from the recession "will take longer than any of us would like -- years, not months." He said he was concerned about the price tag for the economic stimulus plan -- which some experts believe could reach $1 trillion -- but he said bold action was necessary, and that the only way to ease the deficit in the long term is to generate economic activity.

"The conclusion has been that with credit freezing up, with businesses laying off workers, with continued weakness in the housing market and escalating foreclosures, that unless you have a bold approach you could see the economy continue to decline at a pretty rapid clip," Obama said. "That is not acceptable to me, and I don't think it's acceptable to the American people."

Obama made his remarks in announcing US Representative Hilda Solis, a California Democrat, as his nominee for labor secretary; retiring Republican Representative Ray LaHood of Illinois as transportation secretary; former Dallas mayor Ron Kirk as US trade representative; and Maine venture capitalists Karen Mills as head of the Small Business Administration.

Obama appeared to be aware today of some concern among labor activists about Kirk, who has been an outspoken proponent of free trade. Obama and Kirk each made a point of stressing that the United States could engage in free trade while protecting American workers. "He's seen the promise of trade, but also its pitfalls," Obama said. "He knows there's nothing inconsistent about standing up for free trade and standing up for American workers."

Environmental and sustainable growth advocates will be watching closely as LaHood helps Obama formulate his transportation policy, which is a matter of great debate. The president-elect stressed that any transportation spending in the stimulus bill be thoroughly justified.

"If we're building a road, it better not be a road to nowhere," he said. "If we're building a bridge, it better be because an engineer identified a bridge that has a structural weakness and that has to be dealth with." LaHood, in comments that might please advocates of transportation reform, gave a shout-out to Amtrak, mass transit, and light rail in his brief remarks.