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President-elect Barack Obama named his picks for new transportation and labor secretaries Friday, capping off a flurry of Cabinet appointments in the lead-up to the Christmas holiday.
Obama tapped Ill. Rep. Ray LaHood, a moderate Republican lawmaker, for transportation secretary, California Rep. Hilda Solis for labor secretary, former Dallas Mayor Ron Kirk for U.S. trade representative and venture capitalist Karen Mills to head the Small Business Administration.
“Daunting as the challenges we are inheriting may be, I am convinced that our team and the American people are prepared to meet them,”Mr. Obama said. “It will take longer than anybody of us would like — years, not months. It will get worse before it gets better.”
Mr. Obama also fielded questions on the Bush administration’s newly unveiled plan to assist the ailing U.S. auto industry, saying it’s “absolutely necessary” to restructure the companies to save the industry, while also working toward creating “fuel-efficient cars of tomorrow.”
The United States government unveiled $800 billion worth of new loans and debt purchases on Tuesday, hoping another massive infusion of cash would smooth troubled credit markets and make borrowing easier for homebuyers, small businesses and students.
The Federal Reserve said it would buy up to $600 billion in mortgage-backed assets from government-sponsored mortgage giants Fannie Mae and Freddie Mac. It would buy up to $100 billion in debt directly from the companies and up to $500 billion in mortgage-backed securities.
“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the Federal Reserve said in a statement.
Separately, the Fed and Treasury Department announced a $200 billion program to ease commercial lending on debt like student loans, car loans or business loans. The Fed would lend up to $200 billion to holders of asset-backed securities supported by car loans, credit card loans, student loans, and business loans guaranteed by the Small Business Administration.
The program would be seeded with $20 billion in “credit protection” from the Treasury Department, which is drawing the money from the original $700 billion bailout.
“It gives institutions liquidity and it’s clearly direct lending that will help consumers,” Treasury Secretary Henry M. Paulson Jr. said Tuesday at a news conference.The announcements came one day after President-elect Barack Obama unveiled his economic team and tried to assure Americans that he was seeking to fill any leadership vacuum, and said his economic advisers would begin working “today.” The advisers include Timothy F. Geithner, his choice for Treasury secretary.