Politics

CHICAGO (CBS) ― In announcing two more key members of his economic team Tuesday morning, President-elect Barack Obama said budget reform was not optional, but necessary.

He is vowing to get rid of programs that have outlived their usefulness, or that exist solely because of the power of politicians.

A day after introducing the captains of his economic team and promoting a giant jobs plan, Obama on Tuesday is to lay out his budget belt-tightening vision. The dual images - big spender and disciplined budget watcher - were designed to give both political and economic assurances to the public, the Congress and the financial markets.

At his news conference at the Chicago Hilton and Towers, 720 S. Michigan Ave., Obama named Peter Orszag as the director of the Office of Management and Budget. Orszag is currently the head of the Congressional Budget Office. If he is confirmed by the Senate, he will head the White House office through which federal agency budget requests must flow.

Obama also named Robert Nabors as deputy director of the office.

Obama also said he hopes to create jobs, slash "outdated" government programs, and address long-run challenges such as health care in an effort to battle against the economic crisis.

In discussing need for budget reform, Obama reiterated that he plans to fight the economic crisis by creating 2.5 million jobs as he suggested on Monday, as well as providing relief to middle class families and reducing health care costs in both the public and private sectors.

But over the long haul, the structural deficit must be reduced, Obama said.

"If we're going to make the investments we need, we also have to be willing to shed the spending that we don't need," Obama said. "Budget reform is not an option. It's a necessity."

Obama said the country cannot "sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness."

To that end, Orszag and Nabors will join Obama in a line-by-line review of the federal budget and eliminating programs that are unnecessary or outdated, "and insisting that those we do need operate in a cost-effective way," Obama said.

Obama said one expenditure he considers unnecessary was the $49 billion in crop subsidies the federal government gave to billionaire farmers between 2003 and 2006, even though the maximum income for such subsidies is $2.5 million.

Obama also emphasized the need to move toward energy independence and health care modernization.

When asked if his election victory constituted a mandate from the voters who turned out for him, Obama emphasized the need for bipartisan efforts.

"We had, I think, a decisive win, because of the extraordinary desire for change on the part of the American people, and so I don't think there's any question that we have a mandate to move the country in a new direction and not continue the same old practices that got us into the fix that we're in," Obama said. "But I won 53 percent of the vote. That means 46 or 47 percent of the country voted for John McCain."

Obama was also asked about the struggles of city, state and county governments to maintain solvency. Cook County Board President Todd Stroger was expected Tuesday to announce a plan to borrow $740 million to bail out the budget and avoid mass layoffs.

In response, Obama said the federal government would work closely with municipal, county and state governments, particularly on infrastructure issues.

"We are going to have to make sure that we are investing in roads, bridges, other infrastructure investments that lay the groundwork for long-term economic growth," Obama said. "A lot of that goes through states and local governments."

Obama is already starting in the red. The federal government reported a record deficit of $237.2 billion in October, which reflected only a portion of the $700 billion Congress approved last month to rescue the financial markets. The government's red ink has been rising over the past eight years, reversing a surplus achieved during the Clinton administration.

Obama plans to speak to a conference of governors next week - and his own governor, Illinois' Rod Blagojevich plans to be there, too.

Obama's message today for all state and local officials: those billions of dollars we hope to spend for roads, bridges, transit and schools will have to be spent in accordance with national goals, and not frittered away foolishly.

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