Obama vows to get US budget in shape despite stimulus plans

President-elect Barack Obama Tuesday vowed to erase wasteful spending from the deficit-ridden US budget while making wise investments to jump-start the economy.
Obama acknowledged that his plans to inject billions of dollars in stimulus spending would drive the deficit still higher, but stressed the long-term benefits of investment in crumbling US infrastructure and health care systems.
"If we are going to make the investments we need, we also have to be willing to shed the spending that we don't need," Obama said.
"We can't sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness or exist solely because of the power of politicians, lobbyists, or interest groups."
Appointing Peter Orszag to head the White House Office of Management and Budget, he said the 39-year-old graduate of Princeton and the London School of Economics would ensure no "mountain of debt" is left for future generations.
Orszag, who is now the director of the Congressional Budget Office, "doesn't need a map to tell him where the bodies are buried in the federal budget," the president-elect told his second news conference in as many days.
Obama, who takes office on January 20, said he was not trampling on President George W. Bush's authority but insisted the economic emergency demanded that he present a clear sense of direction for the years ahead.
"I think it's important, given the uncertainty in the markets and given the very legitimate anxiety that the American people are feeling, that they know that their new president has a plan and is going to act swiftly and boldly," he said.
Obama also named Rob Nabors to serve as Orszag's deputy. Nabors is currently staff director of the powerful appropriations committee in the House of Representatives, and Obama said the pair were "outstanding public servants."
The appointments fleshed out Obama's economic team a day after he nominated New York central banker Timothy Geithner to be his Treasury secretary and named ex-Treasury chief Larry Summers as his top economic adviser.
Both Summers and Geithner cut their political teeth as senior members of president Bill Clinton's economic team, whose hallmark was deficit reduction.
The US government closed its books on the 2008 fiscal year September 30 with a record deficit of 455 billion dollars, and many analysts say the current fiscal year will end with a whopping gap of one trillion dollars.
The economy is staring at recession after contracting by 0.5 percent in the last quarter, according to the latest government data.
Obama said his immediate plans to create 2.5 million jobs through an infrastructure spending spree required a heavy outlay -- reportedly as much as 700 billion dollars.
He pledged anew to cut taxes for 95 percent of working Americans, and has left himself some wiggle room on whether he will extend Bush's tax cuts for the wealthy after 2010.
"But as soon as the recovery is well under way, then we've got to set up a long-term plan to reduce the structural deficit and make sure that we're not leaving a mountain of debt for the next generation," he said.
Unusually for a president-elect, Obama is publicizing his own economic agenda well in advance of taking office in a bid to reassure jittery investors around the world.
While Bush has been at pains to keep Obama abreast of developments, most recently over a bailout for stricken banking giant Citigroup, the Democrat reaffirmed that "there is only one president at a time."
But given the current "extraordinary circumstances," Obama said the public had to know "that we are putting together a first-class team and for them to have clarity that we don't intend to stumble into the next administration.
"We are going to hit the ground running."
Further economic appointments are expected soon, possibly at a follow-up press conference set for Wednesday.
Those could include Obama's pick for commerce secretary, with New Mexico Governor Bill Richardson reportedly in line for the job of promoting domestic industry, and perhaps Pennsylvania Governor Ed Rendell as energy secretary.
Obama is meanwhile expected next week to fill out his national security posts and select a secretary of state -- with former Democratic rival Hillary Clinton hotly tipped to serve as diplomat-in-chief.