By Hans Nichols and Mark Drajem

President-elect Barack Obama said a “bold approach” is needed to pull the U.S. economy out of a recession.

Obama said his economic team is still working on a proposal. At a Chicago news conference he was asked whether he was willing to commit to $1 trillion to boost the economy, as some economists have said would be necessary.

“I am not going to give you a number because we are still making these evaluations,” Obama said. “What we see in terms of the evaluation of economists from across the political spectrum is that we are going to have to be bold.”

Obama today named three more members of his Cabinet, responsible for transportation, trade and labor, as well as the chief of the Small Business Administration. All four, he said, would have a hand in crafting an economic recovery plan.

Obama’s advisers say they are working on a stimulus proposal that may amount to about $850 billion over two years. Along with spending on infrastructure projects, the plan would include aid to states dealing with higher costs for unemployment and health- care programs. Obama has said he wants to create as many as 2.5 million jobs over the next two years.

Obama said he is concerned about the numbers being talked about for an economic stimulus and he doesn’t intend “to spend money lightly.”

Deteriorating Forecasts

“What has been striking in the conversations that we have had with economists from the left and the right over the past several months is how the economic forecasts have deteriorated,” he said.

The president-elect said his administration, which takes office Jan. 20, will turn attention to controlling the deficit once the economy is back on track.

The U.S. will need to get its “midterm, and long-term budgets under control,” Obama said. “We are going to make some difficult choices on the budget” and that will mean “some fights in Washington.”

Obama also said the emergency loans to General Motors Corp. and Chrysler LLC announced by the Bush administration were “necessary steps” to avoid an economic calamity.

“The auto companies must bring all their stakeholders together” to come with a plan for keeping the industry economically viable, Obama said.

Obama today also finished filling out his Cabinet and continued to fill top spots at executive branch agencies.

Second Republican

In picking Illinois Representative Ray LaHood as his transportation secretary, Obama added his second Republican to his Cabinet. He named California Representative Hilda Solis to be secretary of Labor and Ron Kirk, a former mayor of Dallas, to be U.S. trade representative. Obama also said Karen Mills, a founding partner of New York-based equity firm Solera Capital, will head the Small Business Administration.

LaHood, 63, whose district includes the headquarters of Peoria, Illinois-based Caterpillar Inc., has known Obama for more than a decade and is close to Rahm Emanuel, the Illinois congressman designated by the president-elect as White House chief of staff. He is retiring from Congress this year after serving seven terms.

“We need to remake our transportation system for the 21st century,” Obama said. “Few understand our transportation system better” than LaHood, he said.

Strong Backing

Solis, 51, is a four-term member of Congress with an extensive record on environmental issues and strong backing from labor unions.

The daughter of immigrants, Solis grew up in East Los Angeles. In her remarks, she promised to strengthen federal labor laws and invest in worker training “to help strengthen one of America’s greatest assets, its labor force.”

Obama said that under Solis, the Department of Labor “will once again stand up for working men and women.”

Kirk, 54, an attorney with the Dallas office of Vinson & Elkins, was Dallas’s first black mayor. He was an early supporter and fundraiser for Obama. He promised he would promote a “progressive, pro-growth trade agenda.”

Obama said Kirk will balance the opportunities trade brings to U.S. businesses with protections for workers.

“We must engage in strong, robust trade and open doors for American products,” Obama said. “But I also believe that any trade agreement we sign must be written not just with the interests of big corporations in mind, but with the interests of our whole nation and our workers at heart.”

As mayor, Kirk was a proponent for the North American Free Trade Agreement and China’s entry into the World Trade Organization. While that record earned him the support of business groups, it puts him at odds with some Democrats in Congress who say recent free-trade accords have cost U.S. jobs.

Criticism on Trade

“I have concerns about Mayor Kirk’s vocal support for Nafta and unfair trade with China,” Representative Phil Hare, an Illinois Democrat, said in a statement. “The next USTR must learn from the mistakes of the past.”

Mills, is president of the MMP Group in Brunswick, Maine, would take over an agency that is charged with assisting small businesses with loans and aid. The agency doesn’t have Cabinet rank.

Citing her experience in private enterprise, Obama said, “With Karen at the helm, America’s small businesses will have a partner in Washington.”

Obama also is set to name Harvard University Professor John P. Holdren, as his top science adviser. The appointment of Holdren, 64, a professor of environmental policy, will be announced by Obama tomorrow in his weekly radio address, Harvard, in Cambridge, Massachusetts, said today in a statement.