Obama warns economy will get worse

The nation’s faltering economy will get worse before it gets better, President-elect Obama said Sunday, but he expressed optimism that his rescue plan can create jobs quickly.

In an interview on NBC’s “Meet the Press,” he said his “No. 1 priority” will be passing an economic recovery package with a heavy focus on infrastructure building “that is equal to the task.”

“And things are gonna get worse before they get better,” Obama noted.

{mosads}His assessment comes a week after the country was officially declared in a recession and two days after a Labor Department report cited the worst job losses in three decades.

Obama came into the interview primed to discuss his plans for the economy, which he first sketched out Saturday in his weekly radio address.

He announced a New Deal-like program that he claims will create 2.5 million jobs “while rebuilding our infrastructure, improving our schools, reducing our dependence on oil and saving billions of dollars.”

The plan will include a “large-scale effort” to make public buildings more energy-efficient, rebuild and modernize schools, update and ensure access to electronic medical records, develop widespread broadband networks and make “the single largest new investment in our national infrastructure since President Eisenhower established the Interstate Highway System in the 1950s.”

“I think we can get a lot of work done fast,” Obama said. “When I met with the governors, all of them have projects that are shovel-ready, that are going to require us to get the money out the door, but they’ve already lined up the projects and they can make them work. And now, we’re going to have to prioritize it and do it not in the old traditional politics first wave.”

Pressed by moderator Tom Brokaw, Obama would not say how much his plan would cost. He also continued to soft-pedal on some campaign promises, such as rolling back President Bush’s tax cuts on the wealthy.

Obama’s advisers have signaled recently that he might let the tax cuts expire on their own in 2011 rather than pushing for their repeal immediately. Obama did the same Sunday when he said his economic team is exploring a number of options, but “we don’t yet know what the best approach is going to be.”

Obama wavered on his late campaign promise to impose a three-month moratorium on home foreclosures, but he did say he is still considering such a move and it “remains an important tool, an important option.”

The Bush administration has not done enough to address the growing number of home foreclosures, Obama said, adding that his staff has made this clear to administration officials.

“I’m disappointed that we haven’t seen quicker movement on this issue by the administration,” he said. Later Sunday, at a press conference, Obama said he thinks the Bush administration “understands the severity of the problem” but added, “If it is not done during the transition, then it will be done by me.”

In the wide-ranging “Meet the Press” interview, taped Saturday in Chicago, Obama spoke of the need to shift focus from Iraq to Afghanistan. He said that despite a new agreement between the U.S. and Iraqi governments that would require American troops to withdraw from Iraq by the end of 2011, one of his “first acts” will be to convene the Joint Chiefs of Staff and his national security team to “design a plan for a responsible drawdown.”

At his Sunday press conference, the president-elect also announced his nomination of Gen. Eric Shinseki to head the Department of Veterans Affairs. Bush dismissed Shinseki after he broke with former Defense Secretary Donald Rumsfeld over the need for more troops in Iraq.

“No one will ever doubt that this former Army chief of staff has the courage to stand up for our troops and our veterans,” Obama said. “No one will ever question whether he will fight hard enough to make sure they have the support they need.”
On “Meet the Press,” Obama also declined to get involved in the speculation that campaign adviser Caroline Kennedy is being mentioned as a replacement for Sen. Hillary Rodham Clinton (D-N.Y.), who has been nominated as secretary of State.

He laughed off the question and then praised Kennedy, but he noted that he is trying to stay out of the process for filling the Senate seat in New York and his own seat in Illinois.

“Caroline Kennedy has become one of my dearest friends and is just a — a wonderful American, a wonderful person,” Obama said. “But the last thing I want to do is get involved in New York politics. I’ve got enough trouble in terms of Illinois politics.”