Obama says US economy will worsen

US President-elect Barack Obama has warned America to expect even rougher economic times and said his plan to revive the struggling…

US President-elect Barack Obama has warned America to expect even rougher economic times and said his plan to revive the struggling economy would take time to work.

"Recovery is not going to happen overnight," he told workers at a factory in Ohio that makes parts for wind turbines. "Even with the measures that we're taking, things could get worse before they get better. I want everybody to be realistic about this."

Obama goes into the weekend before his inauguration on Tuesday buoyed by moves in Congress to unlock hundreds of billions of dollars in emergency funding he says he needs to fight the year-long recession.

He also is trying to manage expectations in a country where his promise of change has lifted hopes.

"It's not too late to change course, but only if we take dramatic action as soon as possible," Obama said in remarks meant to underline his push for stimulus measures.

"The way I see it, the first job of my administration is to put people back to work and get our economy working again."

On Thursday Democrats in the House of Representatives unveiled an $825 billion (560 billion pounds) economic stimulus bill that largely adheres to the measures the president-elect has requested.

Also on Thursday, the Senate voted to give Obama authority to spend the $350 billion remaining from a $700 billion financial industry bailout fund created in October.

Despite the priority of short-term economic stimulus, Obama said his administration would also tackle reforming the Social Security retirement system, Medicare and defence procurement.

"All those things are going to have to be done in concert and that's going to be tough," he said on CNN.

"We're going to have to look at all this stuff in a fairly short period of time because we're not going to have five or 10 or 15 years to kick the can down the road. We've got to get started right now."

Obama touted his plans to create half a million "clean energy" jobs during a campaign-style trip to the electoral battleground state of Ohio, which he won in last year's presidential contest.

Obama travels next to Philadelphia, where he will start a train trip today to Washington to generate attention and kick off several days of inauguration festivities.

Obama's swearing-in will cap a nearly three-month transition to power that has been marred by some missteps, including revelations that his choice for treasury secretary, New York Federal Reserve Bank President Timothy Geithner, had failed to pay thousands of dollars in taxes.

Despite the mistake, Obama expects Geithner to be confirmed by the Senate and to go on to lead the administration's charge to boost the economy, which continues to be bombarded by dismal news in one of the worst recessions in decades.

Obama's economic plan aims to create some 500,000 jobs by investing in renewable fuel technology. The plan is part of a wider package that his teams says will save or create between three and four million jobs.

At the Cardinal Fastener & Specialty Company in Bedford Heights, Obama visited with workers and examined the bolts for wind turbines that the company manufactures.

Wind power is one of several environmentally friendly sources of energy that Obama is promoting with the dual aim of weaning the United States from foreign oil while boosting employment in a growing sector.

REUTERS