Obama names Peter Orszag as budget director

President-elect Barack Obama announced Peter Orszag would be his budget director, charged with scrutinizing spending with a goal of "eliminating those programs we don't need and insisting that those we do need operate in a cost-effective way." As an example that needs review, he cited reports that more than 2,700 millionaires received farm payments between 2003 and 2007, even though it wasn't clear they were eligible.

"Budget reform is not an option. It's a necessity," he said, adding he would ask his economic aides to "think anew and act anew."

Orszag is the director of the Congressional Budget Office, a man who the president-elect said "knows where the bodies are buried."

Obama's focus on careful federal spending marked something of a contrast from Monday, when he declared that restoring the economy to health took priority. Then, he urged Congress to prepare an economic stimulus program for him to sign as soon after Inauguration Day as possible. Estimates of the measure range from $500 billion to $700 billion over two years.

In Tuesday's remarks, he said, "As soon as the recovery is well under way, we need to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation."

The deficit has soared during President Bush's tenure, and could well approach the once-unthinkable level of $1 trillion this year by the time the costs of the financial bailout and economic stimulus are taken into account.

Federal red ink hit a record $455 billion in fiscal 2008, ending Sept. 30, more than double the previous year.

"We are going to have to jump-start the economy ... but we have to make sure that those investments are wise. We have to make sure we are not wasting money in every area," Obama said Tuesday, defining the two objectives that will guide his economic program.

Elected on Nov. 4 in an Electoral College landslide, Obama claimed "a mandate to move the country in a new direction and not continue the same old practices that have gotten us into the fix we are in."

At the same time, he said, after gaining only 53 percent of the popular vote," we enter into the administration with a sense of humility and a recognition that wisdom is not the monopoly of any political party."

Along with Orszag, Obama named Robert Nabors as deputy budget director. Nabors has been the top staff aide on the House Appropriations Committee, which prepares spending legislation.

Earlier appointments included New York Federal Reserve President Timothy Geithner as treasury secretary and former Treasury Secretary Lawrence Summers to head National Economic Council.