Filling Obama's Cabinet

WASHINGTON (Reuters) - President-elect Barack Obama has no time to waste.

Two wars and a deepening financial crisis have raised expectations that he will quickly announce picks for senior government jobs after winning Tuesday's presidential election.

Obama, a Democrat who triumphed over Republican John McCain to become the first black U.S. president, has a transition operation well under way to enable him to unveil selections for positions such as Treasury secretary and secretary of state soon.

Illinois Democratic Rep. Rahm Emanuel has emerged as a strong contender for the crucial position of White House chief of staff and an announcement could come as early as Wednesday, sources familiar with the matter said.
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Some analysts believe certain jobs, such as Treasury secretary, could be announced within days and speculation is already rife about several names.

The next Treasury secretary will inherit one of the hottest seats in Washington, faced both with guiding the $700 billion economic bailout package and the regulatory reform needed to prevent a repeat of the current crisis.

In an Obama administration, the short list for Treasury likely includes former Treasury Secretary Lawrence Summers, former Federal Reserve Chairman Paul Volcker and Timothy Geithner, president of the Federal Reserve Bank of New York.

Other names:

Obama has also spoken favorably about investor Warren Buffett, while University of Chicago economist Austan Goolsbee and former Clinton White House aide Jason Furman are also important economic advisers to the incoming president.

Foreign policy possibilities:

For secretary of state, Massachusetts Democratic Sen. John Kerry, former diplomat Richard Holbrooke, outgoing Republican Sen. Chuck Hagel and former Georgia Democratic Sen. Sam Nunn are among the names in the mix.

James Steinberg, a former Clinton adviser, is a top contender for national security adviser. Susan Rice, another former Clinton aide, could be considered for that job or another senior post.

Cabinet will include republicans:

With wars under way in Iraq and Afghanistan, Obama might consider keeping Robert Gates on as secretary of Defense. He might also consider tapping former Navy Secretary Richard Danzig, a close adviser.

Obama's campaign is maintaining the utmost secrecy on planning for the transition, which will occur in the 11 weeks between November 4 and January 20, when he will be sworn in as successor to President George W. Bush.

Obama has said he had "some pretty good ideas" about people he might tap for senior jobs and that he would "absolutely" include Republicans in his Cabinet. read more

Update Nov. 6: more cabinet speculation

Obama's Taxes on Gains and Dividends

If you don't make more than $250,000, this doesn't affect you: 

WSJ: Sen. Obama outlined a plan Thursday to raise tax rates on capital gains and dividend income from 15% to 20% for individuals and families making more than $200,000 and $250,000, respectively. He also detailed a plan to levy payroll taxes on earnings above $250,000 at a rate between 2% and 4%, though that increase wouldn't occur for at least a decade. Right now, payroll taxes, used to fund retirement benefits, are levied on income up to $102,000.

Jason Furman, Sen. Obama's economic-policy director, said the plan would cut taxes to less than 18.2% of gross domestic product. "That's lower than the level of taxes when Ronald Reagan was president," he said.

For more details on Obama's middle class tax cuts, see this post.

Obama's Middle Class Tax Cuts

Art at Obamaartreport.com

Update 8-15: if you make more than $250,000, see this post for taxes on capital gains and dividends. 

This is written by Jason Furman and Austan Goolsbee, economic policy director and senior economic adviser at Obama for America.

WSJ: Both candidates for president have proposed tax plans. But they are starkly different in their approaches and their economic impact. Sen. Obama is focused on cutting taxes for middle-class families and small businesses, and investing in key areas like health, innovation and education. He would do this while cutting unnecessary spending, paying for his proposals and bringing down the budget deficit.

In contrast, John McCain offers what would essentially be a third Bush term, with his economic speeches outlining $3.4 trillion of tax cuts over 10 years beyond what President Bush has already proposed and geared even more to high-income earners. The McCain plan would lead to deficits the likes of which we have never seen in this country. It would take money from the middle class and from future generations so that the wealthy can live better today.

Sen. Obama believes a focus on the middle class is appropriate in the wake of the first economic expansion on record where the typical family's income fell by almost $1,000. The Obama plan would cut taxes for 95% of workers and their families with a tax cut of $500 for workers or $1,000 for working couples. In addition, Sen. Obama is proposing tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth. Read it all.

More about Obama's tax redistribution. 

Obama's Top Economic Advisers

Santa Cruz Obama supporters

Reuters:
* AUSTAN GOOLSBEE - The University of Chicago economist is an expert on tax policy and has written extensively on the role of the Internet and technology in the economy. Though he is not on staff with the Obama campaign, he has been a major player in shaping the candidate's economic plans. He sparked controversy in March after he met with Canadian officials. A leaked memo suggested Gooslbee played down Obama's opposition to NAFTA. The Obama campaign said the memo was inaccurate.

* JASON FURMAN - Furman is Obama's top campaign staff aide on economic policy. He was hired shortly after Obama clinched the Democratic nomination on June 3. Furman was an aide in the Clinton White House and is a close associate of former Treasury Secretary Rubin through their work together on the Hamilton Project, a centrist research organization that promotes policies like free trade and fiscal discipline. Furman's reputation as a backer of free trade has concerned some of Obama's union supporters.

* DAN TARULLO - A professor at Georgetown University Law school, Tarullo is an expert on trade and international economics. He was a senior White House aide to Clinton and served as a "sherpa" to meetings of the Group of Eight industrialized economy meetings. In a June 9 CNN interview, Tarullo said Obama supports free trade but "he's not for trade policies that don't protect American workers."

* LAURA TYSON - Tyson the former chairwoman of Bill Clinton's Council of Economic Advisers and also served as his director of the National Economic Council. She is now a professor at the University of California, Berkeley and has only recently been tapped as a key adviser to Obama.

* PAUL VOLCKER - The former Federal Reserve chairman became a formidable figure in the financial world during the 1980s and is credited with breaking the back of double-digit inflation that marked the early part of the decade. He endorsed Obama in January and attended a March speech the Illinois senator gave in New York in which he called for an overhaul of U.S. financial regulations.

* JARED BERNSTEIN - Bernstein, an economist at the Economic Policy Institute, has written about income inequality and labor markets. His latest book is "Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)." He has called for increased bargaining power for workers.

* ROBERT REICH - Reich was Labor Secretary under Clinton and was seen as a more liberal counterweight to Robert Rubin. He teaches at the University of California, Berkeley.

* PETER HENRY - An expert on emerging markets and the global economy, Henry teaches at Stanford University's Graduate School of Business.