Voice of Revolution

Discussion on Where Obama is Headed: The Economic Team

Develop the Independent Politics
of the Working Class

Living conditions continue to deteriorate as the economic crisis of U.S. monopoly capitalism deepens. US monopolies cut 533,000 jobs in November, the most in 34 years, impacting every part of the economy. This follows last month’s 14-year high unemployment rate. Everyone is anticipating tens of thousands more industrial jobs will be lost as GM, Ford and Chrysler all face crisis. Foreclosures continue at record rates. Poverty, homelessness and hunger are all increasing.

At the same time, the government has announced another $800 billion in bailout funds for the Wall Street financiers. This comes on top of an estimated $7.5 trillion in government bailout and backing for Wall Street. Treasury Secretary Henry Paulson justified the payments saying he must focus on the “stability of the financial sector.” In response to cities and school districts demanding funding, he repeated that bailout funds are for the financiers.

As the capitalist economic crisis deepens and spreads worldwide and government policies do not provide solutions while allowing the financiers to rob more and more of the public purse, the legitimacy crisis of those in power is intensifying. People are recognizing the enormous cost and waste of war funding and Wall Street bailouts. Both give rise to violence, destruction and anarchy, at home and abroad. Both take money out of the economy when what is needed to stimulate the economy is to put money into it – to block payments to the rich and increase funding for social programs. People want a real say so on these vital issues of war and a war economy. Instead, they are being told to trust the powers that be and defend a “free market economy.”

President-elect Barack Obama, introducing his economic team, said “At this moment we must not only restore confidence in our markets. We must also restore the confidence of the middle class families that their government is on their side.” (November 25). He said his team and recovery board would contend with frustration about the “incapacity to take bold, clear, decisive steps to deal with our economic problems.” He added, “At this defining moment for our nation, the old ways of thinking and acting just will not do. We are called to seek fresh thinking and bold new ideas from the leading minds across America.”

In this update Voice of Revolution continues to provide information and views on Obama’s economic team and his new economic recovery board. Obama has chosen Timothy Geithner to head the Treasury Department, Lawrence Summers to head the National Economic Council (NEC) and Peter Orszag for Office of Management and Budget (OMB). He appointed Paul Volcker to head his new Economic Recovery Advisory Board. The composition of the team is that of Wall Street bankers and Federal Reserve officials, with Summers and Volcker being both. The experience they bring is that of being involved in formulating and defending government policies that contributed to the current economic crisis and its severity. They bring experience of doing the same on a worldscale. Will those with responsibility for contributing to the current financial crisis now bring “fresh ideas and new thinking” to the problem? For many people, their appointment has only increased the illegitimacy of a government that refuses to act to defend the rights of the people.

President elect Obama attempted to speak to growing concern that bringing in this old-guard from the Clinton years — and for Paul Volcker, the Nixon and Reagan years — will not bring the change he has promised. Obama said, “I understand where the vision for change comes from. First and foremost, it comes from me. That is my job — to provide a vision in terms of where we are going, and to make sure then that my team is implementing,” (November 26).

Obama’s team brings together those with experience with the IMF and particularly with Asia, at a time when the U.S. is striving to dominate the region. He is establishing a recovery board that will be “his team” on the ground to defend his policies in the ranks of labor and among youth and students. The aim, in part, is to have an organized force loyal to the president and his aims.

Obama indicated what those aims are when he said, “As difficult as these times are, I’m confident that we will rise to meet this challenge — if we are willing to band together and recognize that Wall Street cannot thrive so long as Main Street is struggling.” New thinking on the crisis puts the rights of the people at the center of the economy and society as a hole. Such new thinking could be expressed by saying “Main Street must thrive even if Wall Street is struggling.”

Obama instead is expressing the outlook of the ruling class that Americans and the whole world must work for them. The entire public treasury must be handed over to the rich.

It is an illusion to think that the deep economic crisis can be solved by rallying behind Obama and the aim to have Wall Street thrive. Society can be lifted out of the crisis only by forcing the Old, represented by Wall Street, to give way to the New, represented by the working class, by Main Street. This is at the heart of the present events. Unless the struggle centers on what is new and modern against all that is old and archaic, the people will continue to suffer the consequences of the old arrangements. The new and modern are comprised of all those things which are the product of, and in the service of, the involvement of the working class and people to work out and establish their own system on the basis of their own efforts.

The people can exercise control over their lives only by doing things in a new way, not by rallying behind Obama and the Democrats over which they exercise no control whatsoever. Doing so only serves to prop up the very system that is crisis-ridden and causing them harm. The people have to rally behind themselves and rely on themselves.

The urgent need is for the working class to develop its own independent politics and lead the people to establish their own democratic institutions.

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Paul Volcker Appointed Chair

Obama Establishes Economic Recovery Advisory Board

President-elect Barack Obama announced the establishment of the President’s Economic Recovery Advisory Board on November 26. The board is supposed to provide regular briefings with “independent, nonpartisan information, analysis, and advice” to the president, vice president and their economic team, according to a press release from Obama’s webpage (change.gov). It will be established initially for a two-year term.

Members of the board will be “drawn from among distinguished citizens outside the government who are qualified on the basis of achievement, experience, independence, and integrity.” Obama, in introducing this new board added that it will be composed of “individuals from diverse backgrounds — from business, labor, academia and other areas — who will bring to bear their wisdom and expertise on the formulation, implementation and evaluation of my Administration’s economic recovery plan.”

The recovery board is in addition to economic boards of the Office of the President already in place, including the Council of Economic Advisors (CEA) and the National Economic Counsel (NEC). The CEA is usually composed mainly of academics. Obama recently appointed Christina Romer, of the University of California, Berkeley as its chair. Obama also has his own economic advisory board, made up mainly of business executives including billionaire Warren Buffet and CEOs for Xerox, Time Warner and Google, Citigroup’s Robert Rubin, and other former government officials. The new board appears to be distinguished by its effort to include officials from labor.

The board is being presented as part of Obama’s efforts to have forces on the ground from labor, academia and business that are loyal to him and his plans for the economy. In announcing the recovery board Obama said, “The reality is that sometimes policymaking in Washington can become too insular. The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking — and those who serve in Washington don’t always have a ground-level sense of which programs and policies are working for people, and which aren’t. This board will provide that perspective to me and my administration, with an infusion of ideas from across the country and from all sectors of our economy — input that will be informed by members’ first-hand observations of how our efforts are impacting the daily lives of our families.”

Obama also emphasized that participants from outside of government are being brought into this board in service to the president and that they are to provide “fresh thinking and bold new ideas.” He appointed Paul Volcker, 81, to head the board. Obama said, “It has become increasingly clear in recent months that we are facing an economic crisis of historic proportions. At this defining moment for our nation, the old ways of thinking and acting just won’t do. We are called to seek fresh thinking and bold new ideas from the leading minds across America. And as we chart a course to economic recovery, we must ensure that our government — your government — is held accountable for delivering results.

“This Board is modeled on the President’s Foreign Intelligence Advisory Board created by President Eisenhower to provide rigorous analysis and vigorous oversight of our intelligence community by individuals outside of government — individuals who would be candid and unsparing in their assessment. This new board will perform a similar function for my Administration as we formulate our economic policy. [Note that the Intelligence Advisory Board still exists and participated in the various intelligence issues of the Bush administration, such as that for Iraq, that concerning Iran, etc. — VOR]

In appointing Paul Volcker as chairman, Obama said Volcker “has been by my side throughout this campaign, providing a deep understanding of financial markets, extensive experience managing economic crises, and keen insight into the global nature of this particular crisis.”

Obama also announced “Austan Goolsbee will serve as Staff Director and Chief Economist of the Recovery Advisory Board and act as the primary liaison between the Board and the Administration.” Goolsbee will also be one of the three members of Obama’s Council of Economic Advisers. Goolsbee is a professor at the University of Chicago Booth School of Business where he has taught since 1995.

Paul Volcker

Paul Volcker was Chairman of the Federal Reserve from 1979-87, under Presidents Jimmy Carter and Ronald Reagan. Prior to that, from 1975-79, Volcker was president of the Federal Reserve Bank of New York, working closely with Wall Street.

In his earlier career Volcker worked with the Federal Reserve, Rockefeller’s Chase Manhattan Bank and the Treasury Department. In 1952 Volcker joined the staff of the Federal Reserve Bank of NY as a full-time economist. He left that position in 1957 to become a financial economist with the Chase Manhattan Bank. In 1962 he joined the Treasury as director of financial analysis, and in 1963 he became deputy under-secretary for monetary affairs. He returned to Chase Manhattan Bank as vice president and director of planning in 1965.

From 1969 to 1974 Volcker served as Under Secretary of the Treasury for international monetary affairs. He played an important role in the decisions by the government in 1971 to suspend gold convertibility, meaning the U.S. dollar would no longer be backed by a gold equivalent. Gold convertibility was established as part of the Bretton Woods Agreement after WWII, which made the U.S. dollar the currency of trade on the international market. It also brought into being the World Bank and International Monetary Fund (IMF).

In 1971 under Nixon, the economic crisis reflected itself in both a balance of payments deficit and trade deficit. Large amounts of money were printed up and utilized to pay the country’s military expenditures in the war against Vietnam and for investments abroad. Holders of the dollar abroad lost faith in the U.S. ability to cut its budget and trade deficits and doubted the value of the dollar. They increasingly demanded fulfillment of the U.S. promise to pay in gold. France, in particular, made repeated demands. On August 15, 1971, Nixon unilaterally announced that the U.S. would no longer convert dollars to gold. This decision was backed up by U.S. military might, making it impossible for other countries to secure their gold from the U.S. Nixon also imposed wage and price controls. The decision effectively eliminated the Bretton Woods agreement concerning currency. It also meant countries would now keep their reserves in U.S. dollars, instead of gold — another mechanism to sustain of U.S. hegemony. Volcker played a key role in these actions.

Volcker was appointed Chairman of the Federal Reserve in August 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan. Volcker acted to contend with high inflation rates generated in part by government monetary policy in the 1970s. He did so by now limiting the growth of the money supply, in part by using high interest rates. He repeatedly noted, at the time, that inflation was “jeopardizing the orderly functioning of financial and commodity markets.” The Federal Reserve rates went to 20 percent in June of 1981. While inflation fell from its peak of 13.5 percent in 1981 to 4 percent by 1987, people faced the highest unemployment rates since the Great Depression. The government actions contributed to an economic recession in 1982. There were widespread protests directed at Volcker and the Federal Reserve, including those by construction workers and farmers, who drove their tractors into downtown DC. Volcker also backed Reagan’s mass firing of 11,000 striking air traffic controllers.

Volcker has served as chairman of the board of trustees of the International Accounting Standards Committee, Chairman of the Board of the Group of Thirty (an international group of financiers and academics) and of the Independent -Inquiry Committee for the United Nations Oil-for-Food Program.

Austan Goolsbee

Austan Goolsbee is a professor at the University of Chicago Booth School of Business where he has taught since 1995. He is Senior Economist at the Democratic Leadership Council’s think tank, the Progressive Policy Institute (PPI). He is also a Research Associate at the National Bureau of Economic Research and the American Bar Foundation. He is a member of the Panel of Economic Advisors to the Congressional Budget Office. Goolsbee advised Obama in his 2004 Senate race and was a senior economic advisor to Obama’s 2008 presidential campaign.

(Sources: Federal Reserve, Treasury Department, change.gov, Wikipedia)

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Obama’s Economic Team:
Geithner, Summers and Orszag

President-elect Barack Obama has announced the appointment of Timothy Geithner, head of the Federal Reserve Bank of New York, as Treasury Secretary, and Lawrence Summers, former Treasury Secretary under Bill Clinton, to head the White House’s National Economic Council (NEC). Peter Orszag is to be director of the Office of Management and Budget (OMB). He has served as the director of the Congressional Budget Office since January 2007. Geithner, as Treasury secretary, and Orszag will have to be approved by the Senate, while Summers as a member of the White House staff, will not.

The appointments are being made at a time when the government continues to announce more bailout funds for the rich. The business webpage Bloomberg.com reported that the government has now committed to giving Wall Street $7.5 trillion in public funds, either through bailouts, or government backing of bank and other loans. On November 26, Treasury Secretary Henry Paulson announced an additional $800 billion in public funds directed at “preventing the collapse of the home mortgage and consumer credit market.” An estimated $600 billion of this is to go to Fannie Mae and Freddie Mac, the mortgage companies already bailed out and taken over by the government. As before, the actual value of the bundled mortgages being bought by the government is not known. Paulson added that these new funds are just a “starting point.”

More than $8.5 trillion has now been committed to Wall Street, or more than half of the Gross Domestic Product of the country, estimated at $14.5 trillion for 2008. The $8.5 trillion is the equivalent of about $26,000 for every man, women and child in the U.S. The arrangements so far announced do not require the Wall Street financiers receiving it to put the money into the economy rather than continue to use it for speculation or protecting their own narrow interests. As well, it is not clear under what authority the public funds are being disbursed as Congress has approved only $700 billion.

The announcements were part of three consecutive press conferences by Obama on the economy (11/24-26). He said his focus on the economy speaks to “The frustration about our inability to tackle some of the long-term problems that we’ve been facing and have been talking about for decades, whether it’s healthcare, energy, an education system that’s been slipping behind in critical areas like math or science. And most of all, I think frustration with the incapacity of Washington to take bold, clear, decisive steps to deal with our economic problems.” He introduced his team as one that will “enact bold change.”

Both Geithner and Summers have experience in dealing with Asia, including Japan and China, as well as Latin America. Orszag is expected to play an important role in contending with the growing budget deficit, in securing healthcare legislation that reduces healthcare funding and making changes and cuts to Social Security. Budget deficits for this year are expected to top $1 trillion, more than double the previous record. National debt has increased $15 billion per day in the past 10 weeks, to $10.7 trillion and rising according to the Treasury Department.

The New York Times reports that all three are considered protégés of former Treasury Secretary Robert Rubin. Rubin is currently a director and senior counselor of Citigroup. From 1999 to present, he received $115 million in pay at Citigroup.

Rubin is considered the architect of Citigroup’s strategy of increased speculation and risk-taking using derivatives. The policies have contributed to Citigroup now being on the brink of bankruptcy, rescued by two government bailouts in the past two months.

As Treasury Secretary for Clinton, to contend with economic problems then, Rubin advocated deregulation of financial institutions and markets. According to the New York Times, “In November 1999, senior regulators — including Mr. Greenspan and Mr. Rubin — recommended that Congress permanently strip the Commodity Futures Trading Commission (CFTC) of regulatory authority over derivatives.” This advice was accepted and derivatives were kept clear of regulation by the CFTC. The speculation and huge profits secured through credit derivatives of mortgage-backed securities are a contributing factor for the failure of U.S. financial institutions Bear Stearns, Lehman Brothers, Merrill Lynch, American International Group (AIG) and Washington Mutual in 2008. The more fundamental factor for the crisis, which Obama will have to confront, is the continued private ownership of the financial industry and banking institutions like the Federal Reserve.

Timothy Geithner, Treasury Secretary

The Treasury Secretary heads the Treasury Department, which collects all federal taxes through the Internal Revenue Service (IRS). It essentially holds the federal purse strings, with monies provided to various government departments and federal mandates as decided by Congress through appropriations bills. The Department prints and mints all paper currency and coins in circulation. In the current situation where massive government bailouts are taking place, the Treasury Secretary has been given greater authority to dispense the bailout funds approved by Congress. While current Treasury Secretary Henry Paulson has now made commitments to distribute or provide backing for an estimated $8.5 trillion it remains unclear what authority he is utilizing for such a large sum. However, Congress, to date, has not asserted its authority as the keepers of the federal purse strings, to block such disbursements.

Timothy Geithner currently serves as president and CEO of the Federal Reserve Bank of New York, part of the private Federal Reserve system in the U.S. The NY bank is one of the most significant of the Reserve Banks, as it deals directly with Wall Street. As head of the NY bank, Geithner has been intimately involved in the on-going federal bailout of the financiers. This includes the $700 billion bailout initially voted down by the House of Representatives and widely opposed across the country. He has been working closely with Ben Bernanke, Federal Reserve chairman and current Treasury Secretary Henry Paulson. It has been reported that Geithner was the principal architect behind the government bailout of Bear Stearns, and also was among those attempting to prevent the collapse of Lehman Brothers, which failed, and the bailout of insurance giant AIG. He has also played a key role in formulating monetary policy.

Geithner is a graduate of Dartmouth College and the Johns Hopkins School of Advanced International Studies. He began his career with Kissinger Associates, Inc., in Washington, D.C., a consulting firm founded by former Nixon Secretary of State Henry Kissinger. He served as assistant attaché in the American embassy in Tokyo before becoming an assistant to then Treasury Secretary Summers. He became under secretary of the Treasury for International Affairs under Bill Clinton, from 1998 until Clinton left office in January 2001. In that capacity he worked under both Clinton’s Treasury secretaries, Robert Rubin and Lawrence Summers.

Following that post he served as director of the Policy Development and Review Department at the International Monetary Fund until 2003. He was also a senior fellow at the Council on Foreign Relations, where representatives of the ruling class join together to debate and propose policy.

He has studied Japanese and Chinese and lived in East Africa, India, Thailand, China and Japan. He is called a “substantive and savvy negotiator on the international scene.” Together with Summers, he helped put together the financial package of more than $100 billion as part of the government response to the Asian financial crisis of 1997, a crisis created in part by U.S. policies. He also played a role in negotiating funding for South Korea and Brazil.

The influential newsweekly The Economist said of his appointment, “Mr. Geithner brings two crucial qualities. First, he represents continuity...he is now a familiar face to the most senior executives on Wall Street and to central bankers and finance ministers overseas. Second, he represents competence. He has spent more time on financial crises, from Mexico and Thailand to Brazil and Argentina, than probably any other policymaker in office today.”

Announcement of his appointment saw the Dow Jones industrial average climb 494.13 points, or 6.5 percent.

Lawrence Summers, Director of the National Economic Council

The National Economic Council (NEC) is a part of the president’s White House staff and provides policy advice on the economy. It serves to coordinate the development of the president’s domestic and international economic programs. The NEC director also commonly works closely with the president’s National Security Advisor and participates in meetings of the National Security Council (NSC). Because it deals with both domestic and international issues and works with the NSC, the NEC is one of the more powerful of the White House economic boards.

The NEC was created by Bill Clinton by executive order. At the time Clinton said his focus in world affairs would be on the economic interests of Americans. Obama, facing what is being termed an international economic meltdown, has emphasized the interconnectedness of national security and economic issues. He will likely strengthen the role of the NEC and its work with the NSC. As NEC director, or what is often called the president’s economic advisor, Summers is in a position to participate in the NSC and intervene on various fronts within the administration and provide reassurance to Wall Street that their interests are represented, nationally and internationally.

Summers is currently a professor at Harvard University. He is also a consultant to Goldman Sachs and is a managing director of the DE Shaw and Company hedge fund. He was president of Harvard from 2001 to 2006. He served as Treasury Secretary from 1999 to 2001, under Clinton. Before that he served as Deputy and Under Secretary of the Treasury. He served as chief economist for the World Bank from 1991-1993. Like Geithner, he played an important role in designing Washington’s response to the Mexican and Southeast Asian financial crises (1995 and 1997). Mexico’s crisis stemmed in large part from the impact of the North America Free Trade Agreement (NAFTA), which decimated Mexico’s people and economy.

According to his biography at the Treasury Department webpage, Summers, “was also instrumental in the introduction of indexed Treasury debt securities, and in the reform of the Internal Revenue Service.” The new bonds, indexed to inflation, were supposed to lower government costs but in fact have increased bond yields, and thus government costs, by billions of dollars. The biography continues, “During Summers’s tenure as secretary of the Treasury, the United States used budget surpluses to repurchase Treasury debt for the first time since the 1920s, and extended the life of the Social Security and Medicare trust funds. Summers led efforts to modernize the financial system, extend financial privacy protections, provide for digital signatures, and insure the viability of the over-the-counter derivatives market.” He also worked with the International Monetary Fund, introducing new lending practices and “debt relief” programs that have served mainly to increase the debt and impoverishment of the countries of Asia, Africa and Latin America. He played an important role in negotiating the United States’ agreement to have China join the World Trade Organization.

Summers was on the staff of the Council of Economic Advisers (CEA) under President Reagan from 1982-1983. He served as an economic adviser to the Dukakis Democratic Presidential campaign in 1988.

He is a graduate of MIT and Harvard, where he received a Ph.D under economist Martin Feldstein. He has taught at both universities. As a researcher, Summers has done work in public finance, labor economics, financial economics, and macroeconomics.

Among the controversies he has been involved in are those at the World Bank in 1991. Summers signed a memo written by staff economist Lant Pritchett, defending dumping toxic wastes in third world countries. The memo said in part that “the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”

As president at Harvard he called for the reintroduction of Reserve Officer Training Corps (ROTC) that students and faculty had kicked off campus. He was also involved in a number of conflicts with the faculty, particularly over remarks against women and African Americans, two main constituencies Obama seeks to utilize as a base of support for his executive actions. Summers was forced to resign after the controversies. It is being reported that Summers received this job as NEC head instead of Treasury Secretary in part because of likely difficulties Obama would face during Senate confirmation hearings stemming from these controversies. As NEC head, there are no Senate hearings as the appointment requires no confirmation.

Peter Orszag, Director of the Office of Management and Budget

Obama named Peter Orszag as director of the Office of Management and Budget (OMB). The OMB provides input and information to the president for formulating his budget proposals. OMB also provides advice to senior White House officials on a range of topics relating to budgetary issues, implementation of federal policy, management, legislative and regulatory issues. It plays an important role in overseeing whether federal programs are adhering to presidential policies.

In naming Orszag, Obama said, “If we are going to make the investments we need, we must be willing to shed the spending we do not.” He added, “We cannot sustain a system that bleeds billion of taxpayer dollars on programs that have outlived their usefulness, or exist solely because of the power of a politician, lobbyist or interest group.” Obama has not named specific programs, but given Orszag’s positions on cutting Social Security benefits and reducing government expenditures on healthcare, it is likely these two areas are among those Orszag and Obama will be looking at. This was further confirmed when Obama said that Orszag “Knows what works and what doesn’t, what is worthy of our precious tax dollars and what is not.” Obama also stated that “It is said that a nation’s budget reflects its priorities. I believe that is true.” Obama and Orszag did not comment about why the trillions of dollars in bailout funds are not instead directed to increasing funding for social programs.

Orszag has served as the director of the U.S. Congressional Budget Office since January 2007. Previously he served as Special Assistant to the President for Economic Policy (1997–1998), and as Senior Economist and Senior Adviser on the Council of Economic Advisers (1995–1996) during the Clinton administration.

As a senior fellow and Deputy Director of Economic Studies at the Brookings Institution he did work on proposals to revamp social security. He co-authored a book in 2004 called Saving Social Security: A Balanced Approach. In it, Orszag argues that benefits for future retirees be cut while payroll taxes for social security be increased. He has proposed cuts of 9 percent. In 2005 he said, “Avoiding real reform, either through delay or a free lunch approach merely exacerbates the painful choices that will ultimately be necessary.” Obama underlined the need for reform saying, “In these challenging times, when we are facing rising deficits and a sinking economy, budget reform is not an option. It is an imperative.”

Orszag has also called for changes to government healthcare programs, so as to reduce government payments. He is expected to play an important role in any efforts by Obama to secure healthcare legislation.

Orszag graduated from Princeton University in 1991 and received his Ph.D from the London School of Economics. He sites as mentors economists Alan Blinder, from Princeton, Joseph Stiglitz from Colombia University and former Treasury Secretary and current Citigroup director and advisor.

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For Your Information

Brief Descriptions of Treasury, NEC, OMB

Treasury Department
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue. The Treasury Department is administered by the Secretary of the Treasury, who is a member of the Cabinet.

The Department prints and mints all paper currency and coins in circulation through the Bureau of Engraving and Printing and the United States Mint. The Department also collects all federal taxes through the Internal Revenue Service.

Congress created the Department of the Treasury on September 2, 1789:

“And be it...enacted, That it shall be the duty of the Secretary of the Treasury to digest and prepare plans for the improvement and management of the revenue, and for the support of public credit; to prepare and report estimates of the public revenue, and the public expenditures; to superintend the collection of revenue; to decide on the forms of keeping and stating accounts and making returns, and to grant under the limitations herein established, or to be hereafter provided, all warrants for monies to be issued from the Treasury, in pursuance of appropriations by law; to execute such services relative to the sale of the lands belonging to the United States, as may be by law required of him; to make report, and give information to either branch of the legislature, in person or in writing (as he may be required), respecting all matters referred to him by the Senate or House of Representatives, or which shall appertain to his office; and generally to perform all such services relative to the finances, as he shall be directed to perform.”

The basic functions of the Department of the Treasury include:

• Managing federal finances;
• Collecting taxes, duties and monies paid to and due to the U.S. and paying all bills of the U.S.;
• Producing all postage stamps, currency, and coinage;
• Managing government accounts and the United States public debt;
• Supervising national banks and thrift institutions;
• Advising on domestic and international financial, monetary, economic, trade and tax policy — fiscal policy being the sum of these, and the ultimate responsibility of Congress.
• Enforcing Federal finance and tax laws;
• Investigating and prosecuting tax evaders, counterfeiters, forgers, smugglers, illicit spirits distillers, and gun law violators.

With respect to the estimation of revenues for the executive branch, Treasury serves a purpose parallel to that of the Office of Management and Budget for the estimation of spending for the executive branch, the Joint Committee on Taxation for the estimation of revenues for Congress, and the Congressional Budget Office for the estimation of spending for Congress.

National Economic Council

The National Economic Council (NEC) is a United States government agency in the Executive Office of the President. Created by President Bill Clinton in 1993 by Executive Order, its functions are to coordinate policy-making for domestic and international economic issues, coordinate economic policy advice for the President, ensure that policy decisions and programs are consistent with the President’s economic goals, and monitor implementation of the President’s economic policy agenda at home and abroad. The Director of the NEC is also Assistant to the President for Economic Policy. The NEC commonly has a Deputy Director for Domestic Affairs and a Deputy Director for International Affairs.

The existing structure for membership of the NEC is as follows:

Chair: President of the United States

Director: Appointed by the president with confirmation by the Senate; Obama has appointed Lawrence Summers for this position

Regular Attendees: Vice President, Secretaries of State, Treasury, Agriculture, Commerce, Energy, Housing and Urban Development, Labor and Transportation.

Additional Participants include: National Security Advisor, Chair of the Council of Economic Advisers, Director of the Office of Management and Budget, United States Trade Representative, Administrator of the Environmental Protection Agency, Assistant to the President for Domestic Policy, Assistant to the President for Science and Technology Policy.

Office of Management and Budget

The Office of Management and Budget (OMB) is a Cabinet-level office, and is the largest office within the Executive Office of the President of the United States (EOP). It is an important conduit by which the White House oversees the activities of federal agencies. OMB is tasked with giving expert advice to senior White House officials on a range of topics relating to federal policy, management, legislative, regulatory, and budgetary issues. The bulk of OMB’s 500 employees are charged with monitoring the adherence of their assigned federal programs to presidential policies. OMB performs its coordination role by gathering, filtering, and promulgating the President’s annual budget request, by issuing bulletins, memoranda and circulars dictating agency management practices, by overseeing the “President’s Management Agenda” and by reviewing agency regulations. The Office contains significant numbers of both career and politically appointed staff; OMB staff provide important continuity within the EOP since several hundred career professionals remain in their positions regardless of which party occupies the White House. Six positions within OMB — the director, the deputy director, the deputy director for management, and the administrators of the Office of Information and Regulatory Affairs, the Office of Federal Procurement Policy, and the Office of Federal Financial Management are appointed by the president and confirmed by the Senate.

(Source: WhiteHouse.gov, Wikipedia)

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Information About the Presidential Transition Period

November 5-January 20: Presidential Transition period. President-elect Barack Obama makes main appointments for the Cabinet, to be approved by the Senate on a majority vote. The Cabinet serves the president and is made up of the vice president, the White House Chief of Staff, and the Secretaries of each of the 15 executive departments. The most powerful positions in the cabinet, by order of power, are Secretary of Defense, Secretary of State, Attorney General, Secretary of Homeland Security, and Secretary of the Treasury. The importance of other cabinet members varies, depending on the plans and legislative agenda of the president. For Obama, Secretaries of Health and Human Services and Commerce are likely to play an important role. An indication of this is that he has already has nominated New Mexico’s Governor Bill Richardson for Commerce and publicized plans to nominate former Senator Tom Daschle (South Dakota) for Health and Human Services. Obama must also appoint Ambassadors, CIA chief, and more than 2500 deputy-cabinet officers and lower-level appointments, also approved by the Senate. These most important appointments and confirmations commonly take place within the first 100 days in office, while the rest occur over the course of the first year in office.

The 15 secretaries are as follows:

• Defense
• State
• Attorney General
• Homeland Security
• Treasury
• Health & Human Services
• Commerce
• Agriculture
• Education
• Energy
• Housing and Urban Development
• Interior
• Labor
• Transportation
• Veterans Affairs
•Additional White House -Appointments

According to Obama’s webpage, he will also include in the Cabinet representatives from the Office of Management and Budget, the Environmental Protection Agency, the United States Trade Representative, and the Office of National Drug Control Policy. The heads of all these departments must also be confirmed by the Senate. In addition, he must appoint the ambassador to the United Nations, and other ambassadors worldwide, which also face Senate confirmation.

In addition. an entirely new staff will be chosen to lead these and other offices within the Executive Office of the President. These include:

• National Security Council
• Office of Management and Budget
• Council of Economic Advisers
• Council of Environmental Quality
• Office of Administration
• Office of National Drug Control Policy
• Office of Science and Technology Policy
• President’s Foreign Intelligence Advisory Board
• United States Trade Representative

There are also many offices within the White House Office that will be filled with new personnel. These include:

• National Economic Council
• Homeland Security Council
• Domestic Policy Council
• Office of Faith-Based and Community Initiatives
• Office of National AIDS Policy
• Privacy and Civil Liberties Oversight Boards
• USA Freedom Corps
• White House Fellows Office
• White House Military Office
• Office of the First Lady

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Important Dates for the Presidential Transition Period

November 5-January 20: Presidential Transition
Appointments made for 15-member Cabinet and other key posts, like CIA chief and Ambassador to the United Nations, which require Senate confirmation. Top appointments for various White House economic and security boards, like the National Economic Council and National Security Counsel and Office of Management and Budget, also take place, along with other White House staff positions.

December 15, 2008: The Electoral College delegates in each state meet in their respective states to affirm the results of their state’s presidential elections. These results are forwarded to Congress for approval. The winner of a plurality (not majority) of votes in the state gets all of the state’s electoral college votes, based on the winner-take-all method used in all but two states. Maine and Nebraska divide their electoral college votes proportional to the popular vote. The results from each state are then forwarded to Congress for their approval.

January 6: 111 th Congress Convenes: The newly elected 111 th Congress will hold its first session with new congresspeople participating January 6, 2009. From January 6-January 20, Inauguration Day, Congress is expected to confirm the Electoral College vote and confirm Obama’s main cabinet appointments. However they are not required to do so in this timeframe. Obama is also urging that legislation relating to additional government bailouts be passed by Inauguration Day.

January 20: Inauguration Day, Washington, DC: More than 2 million people are now expected to participate in Inauguration Day events.