New President...Old Problems
Wednesday, November 05, 2008SUSIE GHARIB: Post-election blues on Wall Street today, despite optimism that President-Elect Barack Obama will usher in a new era for the nation. The Dow tumbled 486 points and the NASDAQ lost 98, as investors remained concerned on how the new president will fix the ailing U.S. economy. Where will Obama start and how soon will he have a plan in place? We have two reports tonight, looking at what's first on his agenda and what will he do to reassure investors. We begin with Washington bureau chief Darren Gersh.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This was the only on-camera glimpse of the president-elect today, Barack Obama heading for a workout at the gym. Good thing, because there is much heavy lifting ahead, beginning with the economy. If the Bush administration agrees, congressional Democrats want to pass a new stimulus package worth up to $100 billion later this month. The president-elect would clearly help shape that package. There would likely be more to come after Obama is sworn in. But House Speaker Nancy Pelosi seemed to be lowering expectations for the new Congress and the new administration.
REP. NANCY PELOSI, HOUSE SPEAKER: I think it's important for the American people to know that many of our options have been diminished because of the downturn in the economy in the last couple of months.
GERSH: Even so, many Democrats are hoping for quick action on major items like health care reform and alternative energy. Economist Lawrence Mishel argues the election should be read as a mandate for aggressive government action.
LAWRENCE MISHEL, PRESIDENT, ECONOMIC POLICY INSTITUTE: We no longer are in a situation where those who are invoking that markets always work -- what I would call market fundamentalism -- have a veto. So that gives an opening to use government to pursue national needs.
GERSH: Even before he is sworn in, Obama will have to make quick decisions on the direction of the Treasury's financial rescue program. To make his mark there, it's expected the president-elect will soon name an economic team. New York Federal Reserve President Tim Geithner and former Treasury Secretary Lawrence Summers are leading contenders to replace Henry Paulson. But the National Association of Manufacturers John Engler worries too much tinkering with the Treasury's rescue plan would be counterproductive.
JOHN ENGLER, PRESIDENT, NATIONAL ASSOCIATION OF MANUFACTURERS: We need some certainty in this process. Every time one move is made, there's an impact somewhere else that's requiring almost a second move.
GERSH: Other immediate action items for the Obama administration include financial regulatory reform and passage of a children's health program. Many other items have been promised, but Pelosi cautioned major change takes time.
PELOSI: So we have to choose our priorities very carefully about what is achievable, what can be done in the best possible way.
GERSH: Much of the new president's agenda will be focused on jobs, an issue that will become even more important on Friday. That's when the October employment report is released. The worst-case scenario is expected to show a loss of 300,000 jobs. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
