Washington - President-elect Barack Obama was laying the foundation on Sunday for his new administration, readying a plan for massive government spending and calling on a trusted central bank figure to help lift the economy out of a financial morass not seen in eight decades.

Top Obama aides said the incoming president wants congress to have a two-year economic aid plan of massive spending and new tax cuts ready for him to enact into law by the time he takes the oath of office on January 20.

Obama this weekend gave the general contours of a plan to save or create 2.5 million jobs by the end of 2010. His aides said they would be working on the details over the next month so that lawmakers could begin fashioning legislation when the new congress convenes on January 6.

"Our hope is that the new congress begins work on this as soon as they take office in early January, because we don't have time to waste here, " Obama senior adviser David Axelrod said on Sunday. "We want to hit the ground running on January 20th."

That would give congress two weeks to hold hearings and write legislation before Obama's swearing-in.

Axelrod also warned automakers, which have been seeking billions of dollars in government aid, to devise a plan to retool and restructure their industry. Otherwise, he said, "there is very little taxpayers can do to help them."

During the campaign Obama had called for a $175bn economic recovery package. The one he now envisions would be significantly larger but would incorporate his campaign proposals for new jobs in environmentally friendly technologies - the so-called "green economy."

The plan also would include his proposals for tax relief for middle- and lower-income workers.

But aides said the plan would not include an immediate tax increase on wealthy taxpayers. During the campaign Obama said he would pay for tax relief for middle-income families by raising taxes on people who make more than $250 000.

Big number

"There won't be any tax increases in the January package," one Obama aide said on Sunday. The adviser spoke on the condition of anonymity because the details of the Obama package haven't been fleshed out.

Instead, Obama could let taxes on upper-income families increase when the current Bush administration tax cuts expire in 2011.

Advisers would not discuss a specific size of the new economic plan, though economists have called for spending up to $600bn to shock the economy back into a positive trajectory.

"I don't know what the number is going to be, but it's going to be a big number," Obama economic adviser Austan Goolsbee said on CBS television. "It has to be. The point is to, kind of, get people back on track and startle the thing into submission."

Obama also delved into one of the most pressing foreign policy issues facing his presidency, calling Afghan President Hamid Karzai by telephone and telling him that fighting terrorism there and in the region would be a top priority, Karzai's office said on Sunday.

The Saturday conversation between Obama and Karzai was the first reported contact between the two leaders more than two weeks after the November 4 US election. The United States has about 32 000 American forces in Afghanistan, a number that will be increased by thousands next year.

Fighting terrorism and the insurgency "in Afghanistan, the region and the world is a top priority," Karzai's office quoted Obama as saying during the conversation.

Domestic front

On the domestic front, Obama senior adviser David Axelrod confirmed that the president-elect would name Timothy Geithner, the New York Federal Reserve president, as his treasury secretary on Monday. Axelrod spoke on Sunday on Fox News.

The move followed in one-two fashion Obama's declaration on Saturday that his administration planned to create 2.5 million jobs over the next two years.

Geithner will team with Lawrence Summers, a treasury secretary under former President Bill Clinton and former Harvard University president, who will take over the National Economic Council.

The men will confront an economic crisis that continues to deepen in spite of hundreds of billions of dollars in federal emergency spending in recent weeks.

Word of Geithner's likely selection on Friday helped send the Dow Jones Industrials soaring 6.5% after several days of steep losses.

Both Geithner and Summers will appear with Obama at a Monday news conference in Chicago.

Also on Sunday, a Democratic official said Obama would name New Mexico Governor Bill Richardson as commerce secretary after the Thanksgiving holiday. The official spoke on condition of anonymity because the official was not authorised to speak publicly about the negotiations.

Richardson was energy secretary and UN ambassador under Clinton. He would be the most visible Hispanic named to Obama's Cabinet.

On Saturday, Obama named long-time spokesperson Robert Gibbs as White House press secretary. Gibbs was communications director while Obama was in the senate.

The president-elect is virtually certain to offer Congressional Budget Office chief Peter Orszag the job of directing the White House Office of Budget and Management, and Orszag is likely to accept, Democratic officials said on Saturday.

- AP