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A  somber President-Elect Barack Obama announced his economic team, largely as expected, and laid the groundwork for a “substantial” economic stimulus package in January to “jolt this economy back into place.” He also took pains to reassure the financial markets that his administration doesn’t plan to reverse course on financial-rescue efforts in place, though he said “adjustments in the coming weeks and months” are still possible as events warrant.

Obama made clear that his economic team’s first priority is crafting an economic plan that will both revive the economy in the short term and create 2.5 million jobs over the next two years. And he made equally clear that the deficit is secondary, for the time being, despite projections by some that some the budget gap could reach $1 trillion next year.

“We’ve got to focus first on getting the economy back on track,” he said, acknowledging that “we’re going to see a substantial deficit next year, bigger than we’ve seen in some time,” though he declined to put a number on either the deficit or stimulus spending. “It’s going to be costly,” he said.

Nonetheless, perhaps to emphasize that reining in the deficit will be part of his longer-term planning, he said that on Tuesday, he would address plans to “reform how business is done in Washington, how the budgeting process works” with “meaningful cuts and sacrifices.”

Gains in the Dow Jones Industrial Average, which had risen some 320 points when Obama began speaking shortly after noon Eastern time, fell back to about 225 points over Friday's close after the last question before climbing again to a gain of about 264 points over the following hour.

Although Obama said some of the current administration's efforts to address the financial crisis "didn't work exactly as [intended]," he said they had helped stabilize the financial system. "My administration will honor the public commitments made by the current administration to address the crisis," he said in his prepared remarks.

As has been his habit since winning the Nov. 4 election, Obama said the government must move "swiftly and boldly" to prevent the economic slump from becoming significantly worse, saying "we cannot hesitate or delay." But he also reinforced the prevailing assumption that little in the way of economic stimulus is likely before he is sworn in on Jan. 20, urging "the new Congress" to "work on an aggressive economic recovery plan when they convene in early January." Congress left town last week having passed only an extension of unemployment benefits, with the possibility of returning to provide aid to automakers in December.

Obama also appeared to lay the groundwork for shifting his position on some tax changes, leaving open the possibility that his administration would not seek to quickly undo tax-cuts for upper-income Americans, but rather let them expire by 2011 as they would under current law.

He also supported assistance to the auto industry, but said it must be tied to meaningful reforms by automakers to ensure they remain viable once government aid ends. "We can't just write a blank check to the auto industry," he said. "Congress did the right thing, which is saying, you guys need to come up with the right plan and come back" with it before receiving any financial assistance.

The tone of his comments to reporters at the Hyatt Chicago were grave, warning that the country is "facing an economic crisis of historic proportions." But he tempered that with faith in "the spirit of determination and optimism that has always defined us."

"Again, this won't be easy," Obama said. "There are no shortcuts or quick fixes to this crisis ... and the economy is likely to get worse before it gets better." Then, wrapping up his prepared comments, he added: "I know we can work our way out of this crisis because we've done it before."

The economic team announced at the event was largely as reported over the weekend, with New York Federal Reserve President Timothy Geithner named as Obama's Treasury nominee and former Treasury chief Lawrence Summers named as director of the National Economic Council, making him perhaps Obama's top economic adviser. (BusinessWeek.com has more on Geithner and Summers.)

However, Obama tapped Christina D. Romer, a Berkeley economist and co-director of the committee that officially declares recessions, as director of the Council of Economic Advisers. Many had expected Austan Goolsbee, a University of Chicago behavioral economist and senior campaign economic adviser, to take the position. Romer's work includes research into the U.S. recovery from the Great Depression.

Obama also named Melody C. Barnes as director of the Domestic Policy Council, which coordinates domestic initiatives across the executive branch to match presidential priorities. Barnes, who works at the progressive Center for American Progress think-tank and served as a top domestic-policy adviser to Obama's campaign, will focus in part on health-care reform, working with the administration's Health and Human Services secretary. Former Senate Majority Leader Tom Daschle is expected to take that post.

Heather Higgenbottom, a former legislative director for Sen. John Kerry and founder of a national-security think-tank, will be Barnes' deputy.

WASHINGTON (CNN) -- President-elect Barack Obama could reverse some of President Bush's most controversial executive orders, including restrictions on embryonic stem cell research, shortly after taking office in January.

Two other executive orders from Bush -- one dealing with a so-called "gag" order on international aid organizations regarding abortion, the other with oil and gas drilling on federal lands -- also are receiving increased scrutiny.

Obama's transition team is reviewing hundreds of Bush's executive orders, according to John Podesta, Obama's transition co-chair.

New presidents often use executive orders to put their stamp on Washington quickly. Unlike laws, which require months to complete and the consent of Congress, presidents can use their executive authority to order federal agencies to implement current policies.

"Much of what a president does, he really has to do with the Congress -- for example, budgeting, legislation on policy -- but executive actions are ones where the president can act alone," said Martha Kumar of the White House Transition Project, a nonpartisan group established to help new presidential administrations. See what orders Lincoln, Franklin D. Roosevelt, other presidents issued »

Obama is expected to use his executive authority to reverse Bush's order limiting the types of embryonic stem cell research that can receive federal tax dollars.

Advocates for those suffering from a host of diseases -- including diabetes, Parkinson's disease and spinal cord injuries -- are eagerly awaiting the Bush-era restrictions to be lifted.

"We have every reason to believe -- if not on Day One, then in the very near future -- they will be issuing an order rescinding this policy," said Amy Comstock Rick, president of the Coalition for the Advancement of Medical Research. Watch how Obama could reverse Bush »

In August 2001, Bush barred the National Institutes of Health from funding research on embryonic stem cells other than that using 60 cell lines existing when he signed the executive order.

Researchers say the ban has limited their progress and want the opportunity to create new stem cells from human embryos. Many conservatives, however, object to the destruction of human embryos because they believe it ends a human life.

On his campaign Web site, Obama said he supports the creation of new stem cells from embryos created for in vitro fertilization treatments that would otherwise be discarded.

But White House spokeswoman Dana Perino on Monday suggested that the incoming Obama administration should consider keeping Bush's policy in place.

"Unfortunately, the president's position on stem cells has been misconstrued over the years, with the suggestion that President Bush put a ban on research for embryonic stem cell research. That is not true," Perino said. "The president made a very important choice after a lot of careful deliberation." Watch Obama's ambitious agenda »

Other controversial Bush measures Obama is expected to overturn are related to abortion and family planning.

U.S. State Department officials and family planning groups such as Planned Parenthood said they expect Obama to overturn the "Mexico City" policy, first instituted by the Reagan administration. The policy prevents taxpayer dollars from funding groups that perform or promote abortions overseas.

President Clinton dropped the order, but Bush re-implemented it and expanded the policy to ensure State Department funding does not go to family planning organizations that even counsel about abortion.

An Obama administration also could overturn the Bush administration policy of banning funding to organizations such as the U.N. Population Fund that operate in countries that practice forced sterilization, including China, which adheres to the "one child" policy.

Podesta said his team also is reviewing Bush's order that lifted restrictions on oil drilling on fragile federal lands in Utah. Environmental groups decried Bush's decision when he opened the lands to exploration this month, and Podesta called the decision a "mistake."

One set of executive orders that may take longer to overturn pertains to detainees at the Guantanamo Bay, Cuba, military prison.

Obama has said he wants to close the prison, but Denis McDonough, a senior adviser to the incoming Democrat, said Monday that no decisions have been made about what to do with the prison's 255 inmates.

"There is no process in place to make that decision until his national security and legal teams are assembled," McDonough said.

Reversing Bush's executive orders would be an immediate way for Obama to show that a new era has begun in Washington, said Jonathan Turley, a George Washington University law professor.

"Until President Obama gets rid of all these executive orders, he'll be sharing his presidency with his predecessor," Turley said. "Now that's a particularly obnoxious thought for an administration that was elected for change

WASHINGTON (CNN) -- Computers at the headquarters of the Barack Obama and John McCain campaigns were hacked during the campaign by a foreign entity looking for future policy information, a source with knowledge of the incidents confirms to CNN.

The source said the computers were hacked mid-summer by either a foreign government or organization.

Another source, a law enforcement official familiar with the investigation, says federal investigators approached both campaigns with information the U.S. government had about the hacking, and the campaigns then hired private companies to mitigate the problem.

U.S. authorities, according to one of the sources, believe they know who the foreign entity responsible for the hacking is, but refused to identify it in any way, including what country.

The source, confirming the attacks that were first reported by Newsweek, said the sophisticated intrusions appeared aimed at gaining information about the evolution of policy positions in order to gain leverage in future dealings with whomever was elected.

The FBI is investigating, one of the sources confirmed to CNN. The FBI and Secret Service refused comment on the incidents. Watch Brian Todd's report on the investigation. »

The sources refused to speak on the record due to the ongoing investigation and also because it is a sensitive matter involving presidential politics.

As described by a Newsweek reporter with special access while working on a post-campaign special, workers in Obama's headquarters first detected what they thought was a computer virus that was trying to obtain users' personal information.

The next day, agents from the FBI and Secret Service came to the office and said, "You have a problem way bigger than what you understand ... you have been compromised, and a serious amount of files have been loaded off your system."

One of the sources told CNN the hacking into the McCain campaign computers occurred around the same time as the breach into those of Obama's campaign.

Representatives of the campaigns could not be reached for comment on the matter.