Bush spurs economic action, but Obama sets agenda

President George W. Bush got a second bloc of world leaders to endorse comprehensive action to remedy the global financial crisis. But his successor, Barack Obama, is already setting the coming economic agenda.

The formal transfer of power doesn't take place until Jan. 20, but don't tell that to financial markets. They are already taking their cues from Obama and his team.

Wall Street surged by nearly 500 points on Friday after reports that Obama would pick Timothy Geithner, the well-respected head of the New York Federal Reserve, to be his Treasury secretary.

Obama was to formally present his economic team on Monday and elaborate on his weekend call for a sweeping economic stimulus to save and create 2.5 million jobs over the next two years.

It is not that Bush did not have his own successes in Lima at his eighth and final summit of the 21-nation Asia-Pacific Economic Cooperation forum.

The leaders of Pacific Rim countries endorsed the action plan drafted a week ago in Washington by the Group of 20, representing the world's richest nations and major developing countries such as China, Brazil and India.

The G-20 and the APEC leaders are now both on record pledging to cooperate on economic stimulus measures, overhaul financial regulation and avoid the temptation to erect new trade barriers during the current downturn.

The APEC leaders boldly declared an end date for the current troubles, saying, "We are convinced that we can overcome this crisis in a period of 18 months."

Bush economic adviser Daniel Price told reporters after the APEC summit that the president is even more optimistic and believes "the actions we are taking now will begin to produce result in the much nearer term."

Both summits were seen as confidence-building exercises at a time when the global economy is facing perhaps its worst financial crisis since the 1930s.

The hope is that APEC will have more impact than the G-20, which was greeted with a collective yawn by markets that promptly reeled off another string of stomach-churning declines last week. The slide stopped only after word emerged Friday afternoon that Obama had selected his economic team.

The market's positive reaction to Obama's choice for Treasury secretary was followed by wide news coverage of Obama's economic plan - delivered in a Saturday radio address - which overshadowed Bush's own economic speech the same day to the APEC meeting.

"On economics, the torch has clearly been passed," said Mark Zandi, chief economist at Moody's Economy.com. "Everyone is now looking to the Obama team for guidance on how the United States will respond to this global crisis."

While Obama stressed right after the Nov. 4 election that the country only has one president at a time, his transition team seems to have decided the economy is so bad they can't afford to wait for January to signal their intentions.

"We don't have time to waste here," Obama senior adviser David Axelrod said in appearances Sunday on Fox News and ABC. "We want to hit the ground running on Jan. 20th."

Given the turmoil in financial markets, analysts said Obama is right to try to reassure markets he will not allow a period of drift while his administration takes command.

"The fact that Obama is coming out now publicly with his plan is an effort to shore up confidence so things don't become completely unraveled before Inauguration Day," Zandi said.

In his radio address, Obama was blunt about the size of the problem and the need for speed.

"We are facing an economic crisis of historic proportions," he said. "I have already directed my economic team to come up with an Economic Recovery Plan that will mean 2.5 million more jobs by January of 2011 - a plan big enough to meet the challenges we face that I intend to sign soon after taking office."

Obama sketched out an effort that had elements of the New Deal programs unveiled by President Franklin Roosevelt during the Great Depression. Obama said he would jump start job creation by putting people back to work rebuilding crumbling roads and bridges, modernizing schools and pursuing alternative energy sources.

Sen. Charles Schumer, D-N.Y., and former Labor Secretary Robert Reich, a member of Obama's economic advisory board, both suggested a stimulus program in the range of $500 billion to $700 billion, much bigger than the $175 billion Obama talked about in the campaign.

Obama aides also were sending signals that Obama would modify his tax proposal: keeping the increased tax cuts for the middle class but deferring plans to raise taxes on families making over $250,000 annually, at least until the downturn ends.

Bush also won support for one last push to advance free trade. The APEC countries agreed to send trade ministers to Geneva in December to try to break the logjam that has prevented completion of a seven-year effort to lower global trade barriers - talks known as the Doha Round.

Many analysts held out little hope Bush would get a trade deal before Jan. 20, but some said the administration bring stronger offers to the bargaining table to snag a final economic victory.

It was on trade that APEC leaders, whose countries have benefited from increased trade, expressed the most concern about where Obama might switch course from Bush.

Obama received strong backing from U.S. labor unions during the campaign and has said as president he would review the U.S. free trade agreement with Canada and Mexico.

In Lima, Mexican President Felipe Calderon said any attempt to renegotiate the North American Free Trade Agreement would create "not more markets and more trade, but fewer markets and less trade" while Canadian Prime Minister Stephen Harper hailed NAFTA as a great success.

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Associated Press Writer Ben Feller contributed to this report.