US economic recovery plan 'could cost $700bn'

BARACK OBAMA has vowed to do "whatever it takes" to fix the US economy as crisis continued to grip the country.

The president-elect is working at full speed with his transition team to put together a recovery plan that he believes will see the country emerge from its financial plight.

His top adviser, David Axelrod, said a planned multi-billion-dollar stimulus package was likely to be put into force soon after the January inauguration. It would be far in excess of the $175 billion Mr Obama promised during the campaign. Mr Axelrod said Mr Obama was "going to do what is necessary".

He said: "I'm not going to throw a figure out here. What he said is, he wants a plan big enough to deal with the large challenges we face."

Details of the rescue plan came as Mr Obama prepared to formally present his economic team today. The president-elect has made many key appointments in readiness for taking over the White House in January.

Democratic senator Charles Schumer said he expected the cost of the stimulus plan could be $700 billion. House speaker Nancy Pelosi said she thought it should be several hundred billions of dollars.

Mr Obama gave details of his recovery plan at the weekend in which he said he hoped to create 2.5million jobs by 2010. American workers would rebuild the nation's roads and bridges and modernise schools. The creation of more alternative energy sources was also part of the plan.

"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," Mr Obama said in a broadcast seen on YouTube.

To put his economic plan into operation Mr Obama has picked what he believes is a "dream team". Tim Geithner, president of the Federal Reserve Bank in New York, and Lawrence Summers, a former treasury secretary in Bill Clinton's administration, were today confirmed as part of his new government.

Mr Geithner will be treasury secretary while Mr Summers will be head of the National Economic Council.

One ailing sector that cannot count on a handout is the motor industry. Mr Obama wants the "Big Three" carmakers, Ford, General Motors and Chrysler, to come up with a survival plan next month before they get any help.