A massive economic recovery plan is coming in the early days of President-elect Barack Obama's administration, but it's undecided whether that will be accompanied by a tax increase through the elimination of cuts instituted at the beginning of President Bush's administration.
Obama is counting on his economic dream team of Tim Geithner and Lawrence Summers to help the country out of a spiraling downturn that has claimed 1.3 million jobs this year and sent the stock market to its lowest levels in five years.
Geithner, who now heads the Federal Reserve Bank in New York, has been tapped as Obama's choice for treasury secretary while Lawrence Summers, former Harvard University president and treasury secretary in Bill Clinton's administration, is expected to become head of the National Economic Council.
"We need the best people we can find, the best minds in our country, to help us accomplish that plan, and people like Tim Geithner and Larry Summers are among those people," Obama senior adviser David Axelrod told "FOX News Sunday."
"Tim Geithner is someone who had experience in dealing with economic crises as the assistant secretary of treasury for international affairs in the '90s. He's obviously intimately involved with the situation now in his role as president of New York Fed. By temperament and experience, he's the right man to lead the Treasury now," he said.
Both men's designations will be made formal at a press conference Monday morning.
The Dow rallied 500 points Friday with the announcement of Obama's new advisers, but in the previous two days had dropped 873 points, more than 10 percent of its value. The Standard & Poor's 500 index had sunk to its lowest level since 1997.
The two men will be largely responsible for overseeing the economic recovery that the president-elect wants to push through Congress immediately after taking his oath of office. That should be fairly easy with the heavily Democratic composition of the 111th Congress to be sworn in on Jan. 6, two weeks before Obama takes the oath of office.
Obama had suggested over the summer a stimulus plan costing about $175 billion. However, since then a bailout of financial institutions has cost the government $700 billion and the economy has foundered further.
Sen. Chuck Schumer, D-N.Y., said Sunday he expected the stimulus plan to be as high as $500 billion to $700 billion. House Speaker Nancy Pelosi said she thought it should be several hundred billions of dollars.
Axelrod would not give a precise figure.
"Well, as he said yesterday, the economic recovery plan we are going to bring in January has to be big enough to deal with the huge problem we face," Axelrod said. "The projections are that things may get worse before they get better. We're facing the biggest economic challenges we've had really since the Great Depression. And we want to hit the ground running on January 20th."
But Obama economic adviser Austan Goolsbee said $600 billion isn't outside the realm of possibility.
"I don't know what the number is going to be, but it's going to be a big number," Goolsbee said on "Face the Nation." "It has to be. The point is to, kind of, get people back on track and startle the thing into submission."
Axelrod added that much of the economic recovery will entail provisions laid out by Obama in a YouTube video released Saturday. In his weekly address as president-elect, Obama said he wants to create or save 2.5 million jobs over the next two years by spending billions of dollars on public work projects and developing alternative energy sources and efficient cars.
"These aren't just steps to pull ourselves out of this immediate crisis. These are the long-term investments in our economic future that have been ignored for far too long," Obama said.
"I expect he will ask for what is necessary to begin this process of economic recovery, to put people to work repairing bridges and schools, and working on alternative energy projects, and to do the range of things we need to do not just to get out of our problems in the short term, but to build our economy in the long term," Axelrod said.
But with the economy heading toward recession and the Bush era tax cuts set to expire in 2011, Axelrod said the decision hasn't been made yet whether to kill them early or let them die a natural death.
"Those considerations will be made. The main thing right now is to get this economic recovery package on the road, to get money in the pockets of the middle class, to get these projects going, to get America working again, and that's where we're going to be focused in January," Axelrod said.
Axelrod also warned automakers, who are seeking billions of dollars in government help to stave off collapse, to devise a plan to retool and restructure their industry. Otherwise, he said, "there is very little taxpayers can do to help them."
Among the most pressing economic issues is the fate of the auto industry. Congress last week rebuffed appeals for help from executives from GM, Chrysler and Ford. Congressional leaders urged them to return next month with a specific reorganization plan that spelled out how much money they need and how they intended to remain financially viable.
Axelrod said "the signal sent by Congress was the right one."
The auto executives did not make a strong impression during congressional hearings last week -- appearances that were further undermined upon news that they had flown to Washington in corporate jets.
Axelrod couldn't resist taking a jab at the executives.
"I hope that they will come back to Washington in early December -- on commercial flights -- with a plan," he said.