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Obama: Economy to get worse before it improves

2008-12-08 05:43:23

By DAVID ESPO, AP Special Correspondent David Espo, Ap Special Correspondent

Sun Dec 7, 10:36 pm ET

WASHINGTON President-elect Barack Obama said Sunday the economy will get

worse before it gets better, pledged a recovery plan "equal to the task" and

warned lawmakers that the days of pork barrel spending are over.

Less than six weeks before his inauguration, Obama declined to say how large an

economic stimulus plan he envisions. He said his blueprint for recovery will

include help for homeowners facing foreclosure on their mortgages if President

George W. Bush has not acted by Inauguration Day, Jan. 20.

"We've got to provide a blood infusion to the patient right now to make sure

that the patient is stabilized. And that means that we can't worry short term

about the deficit. We've got to make sure that the economic stimulus plan is

large enough to get the economy moving," he said.

Obama made his comments on NBC's "Meet the Press," in his most extensive

interview since winning the White House more than a month ago, and later at a

news conference in Chicago.

The president-elect said it is important that domestic carmakers survive the

current crisis, although he accused the industry's executives of taking a "head

in the sand approach" that has prevented their companies from becoming more

competitive.

"Congress is doing the exact right thing by asking for a conditions-based

assistance package that holds the industry's feet to the fire and gives the

industry some short-term assistance," he said.

In addition to the policy issues, Obama avoided a direct answer when asked

whether he has quit cigarettes as he prepares to move into a no-smoking White

House.

"I have done a terrific job, under the circumstances, of making myself much

healthier. And I think that you will not see any violations of these rules in

the White House," he said.

Obama called the news conference to introduce retired Gen. Eric Shinseki as his

choice to head the Veterans Affairs Department. Shinseki, who was a four-star

general, was forced into retirement five years ago by the Bush administration

after saying the president's plans to invade Iraq required more troops.

Shinseki pledged to build a "smooth, error-free, no-fail benefits-assured

transition" back to civilian life for veterans.

Twice in the opening moments of the NBC interview, the president-elect said the

economic situation "is going to get worse before it gets better," an unspoken

plea with voters to have patience as the incoming administration tries to

grapple with the issue.

He announced plans Saturday for the largest public works spending program since

the creation of the interstate highway system a half-century ago, although he

said aides are still debating among themselves how much it should cost.

"What we need to do is examine, what are the projects where we're going to get

the most bang for the buck? How are we going to make sure taxpayers are

protected? You know, the days of just pork coming out of Congress as a

strategy, those days are over," he said.

Some lawmakers have mentioned an economic aid plan in the range of $500 billion

or higher, and Democratic leaders say they hope to have legislation ready soon

after Jan. 20.

The economic indicators have darkened since Obama's election, and Friday's

report that 533,000 jobs were lost in November was the worst performance in

more than 30 years. Unemployment stands at 6.7 percent, retailers are reporting

weak holiday sales and the credit markets have yet to recover from the freeze

that led Congress to approve a $700 billion bailout before the election.

Turning to foreign policy, the president-elect sidestepped a question about the

pace of a troop withdrawal from Iraq, saying he would direct U.S. generals to

come up with a plan "for a responsible drawdown." He said in the campaign he

wanted most U.S. troops withdrawn within 16 months, but did not say then, nor

has he now, how large a deployment should be left behind.

"We are going to maintain a large enough force in the region to assure that our

civilian troops or our civilian personnel and our embassies are protected, to

make sure that we can ferret out any remaining terrorist activity in the

region" and providing training support for Iraqi personnel.

He did not respond directly when asked whether he believes India should have

the right to pursue terrorist targets inside Pakistan in the wake of the deadly

attacks in Mumbai. He also said he wants to "reset U.S.-Russian relations"

following the Bush era.

"They are increasingly assertive and when it comes to Georgia and their threats

against their neighboring countries I think they've been acting in a way that's

contrary to international norms," he said of Kremlin leaders.

The president-elect declined to comment on the possible appointment of Caroline

Kennedy to New York Sen. Hillary Rodham Clinton's seat in the Senate. Obama

tapped Clinton recently as his secretary of state.