Economy won't stop Obama's priorities, aides say

WASHINGTON (Reuters) - The economic crisis will not stop President-elect Barack Obama from expanding health care, overhauling education and energy policy, and passing a middle-class tax cut soon after he takes office in January, senior aides said on Sunday.

Meanwhile the U.S. Congress should act to ease the pain of an economy sliding into recession by extending unemployment benefits and boosting aid to states struggling to meet their health-care obligations, they said.

Obama's transitional team has outlined an ambitious agenda for the next several months as it scrambles to assemble an administration in the face of what is widely viewed as the worst economic slump since the Great Depression.

The economic crisis will not prevent Obama from pursuing the priorities he outlined on the campaign trail, said John Podesta, co-chair of Obama's transition team.

These include extending heath care to the nation's 47 million uninsured, reducing U.S. reliance on foreign oil, and improving public education, Podesta said.

"These are all core, if you will, economic questions and they need to be tackled together, and I think you'll have a program, and a strategy to move aggressively across all those fronts," Podesta said on CNN's "Late Edition."

Congress is expected to return in a temporary session as soon as next week to take up a stimulus package defeated by Senate Republicans in September.

That package should not be tied to a free-trade deal with Colombia as some Republicans have suggested, said Illinois Rep. Rahm Emanuel, who will become Obama's chief of staff when he takes office on January 20.

"You don't link those essential needs to some other trade deal," Emanuel said on ABC's "This Week."

STRONGER DEMOCRATIC MAJORITY

Senate Democratic leader Harry Reid cautioned, however, that he would have a hard time passing any economic stimulus bill before January, when the new Congress reflects recent election gains in a wider Democratic majority.

"I'm senior enough and experienced enough to know you can't do something with nothing. I need votes," Reid told CNN's "Late Edition." "There is no reason for me on the floor to have a vote that I know I am going to lose."

Emanuel said Obama aims to push another stimulus package in January -- this one containing a tax cut for the middle class and job-creating construction projects. He declined to say whether Obama would still pursue a tax increase for the wealthiest Americans.

Obama's stimulus proposals have been estimated to cost around $190 billion.

He is likely also to move quickly to reverse certain executive orders by President George W. Bush's outgoing administration. These include orders on stem cell research and oil and gas drilling in some areas, Podesta told Fox News Sunday.

"I think across the board, on stem cell research, on a number of areas, you see the Bush administration even today moving aggressively to do things that I think are probably not in the interest of the country," Podesta said.

"They want to have oil and gas drilling in some of the most sensitive, fragile lands in Utah that they're going to try to do right as they (are) walking out the door."

South Carolina Rep. James Clyburn, the third-ranking Democrat in the House of Representatives, said on CNN that health care should lead off the agenda of the next Congress.

But Florida Republican Sen. Mel Martinez said on NBC's "Meet the Press" that it would be a "big mistake" to immediately tackle an ambitious, politically divisive health care bill. "We cannot deal with health care in the current crisis mode that we're in," he said.

(Additional reporting by John Crawley and Eric Walsh; editing by Chris Wilson)