President-elect Barack Obama says he will move swiftly to improve the U.S. economy and promote long-term growth upon taking office next month. Congressional leaders are working with the White House to craft a government package to rescue the failing U.S. auto industry.
Throughout the campaign season, then-candidate Barack Obama promised to overhaul U.S. economic policy and combat the effects of what was commonly described as an "economic downturn".
Since winning the November election, the president-elect has seen the economy go from bad to worse. The United States has officially entered a recession, with massive job losses, continued home foreclosures, and extreme market volatility.
Unprecedented federal spending has neither eliminated a severe credit crunch nor stemmed the tide of major corporations in need of government intervention to stay afloat.
Mr. Obama acknowledged the increasingly dire nature of the situation in an interview on NBC's Meet The Press program.
"This is a big problem, and it is going to get worse," said Barack Obama. "My number-one priority coming in is making sure that we have got an economic recovery plan that is equal to the task."
In recent days, the president-elect has outlined an ambitious plan to put Americans back to work by rebuilding the country's infrastructure and making the United States more energy efficient. The estimated price tag, in the hundreds of billions of dollars, would come on top of a $700-billion financial rescue package Congress approved in October.
"The key for us is making sure that we jumpstart the economy in a way that does not just deal with the short term, does not just create jobs immediately, but also puts us on a glide path for long term sustainable economic growth," said Mr. Obama.
Of immediate concern is the fate of U.S. automakers, which are asking for billions of dollars in emergency government loans to stave off bankruptcy.
Mr. Obama noted the importance of automobile manufacturing to the U.S. economy, but said in return for federal assistance the industry must embrace reform, become more competitive, and show it can be profitable.
Congressional leaders have been negotiating with the White House over the size of a rescue loan and the source of the funding.
Speaking on Fox News Sunday, Michigan Democratic Senator Carl Levin expressed optimism that an agreement will be forthcoming.
"I am very confident that there will be a deal and that it will happen within 24 hours," said Senator Levin. "There is a common understanding that this is a global problem that has created the loss of sales by auto industries around the world. This is not just a unique American problem, and every other government that produces automobiles that I know of is providing loans to their auto industries."
But Alabama Republican Senator Richard Shelby opposes federal intervention, saying he does not believe restructuring plans put forth by carmakers are adequate to assure long term viability.
"I think this is a bridge loan to nowhere," said Senator Shelby. "This is a down payment on many billions to come. We would like to save them, but they have got to save themselves, and I do not believe they are willing to save themselves. They could be restructured the right way, and they do not want to do that."
Appearing on CNN, General Motors' top executive (Rick Wagoner) admitted that his corporation's business model - which emphasized trucks and other large vehicles over smaller, more fuel-efficient ones - was lacking.
Autoworkers union officials say they will consider wage and benefits concessions as part of a comprehensive plan to save the industry.