Obama Unveils Orszag for OMB, Emphasizes Budget Cuts

In his second of three economic news conferences in three straight days, President-elect Barack Obama Tuesday introduced Peter Orszag as his budget director, promising to eliminate wasteful Washington spending at the same time as he seeks a massive stimulus package to "jump-start" the flailing financial world.

Mr. Obama said that given his push for an aggressive stimulus package he could understand concerns or questions that he might represent "more of the same when it comes to Washington spending. And the answer -- I want to be very clear -- is no," Obama said. "We are going to have to jump-start the economy. And there's consensus that that requires a bold plan to make the investments in the future. But we have to make sure that those investments are wise. We have to make sure that we're not wasting money in every area."

Along with picking Orszag, the current director of the Congressional Budget Office, to direct the Office of Management and Budget, Obama also announced another Hill veteran, House Appropriations Committee staff director Robert Nabors, to serve as Orszag's deputy, just a day after he filled other top financial slots, including Timothy Geithner for Treasury Secretary and Lawrence Summers as Director of the National Economic Council.

"Peter doesn't need a map to tell him where the bodies are buried in the federal budget," Obama said to a basement ballroom of reporters at the Chicago Hilton. "He knows what works and what doesn't, what is worthy of our precious tax dollars and what is not."

"It is very important for the American people to understand 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," Obama emphasized.


When he is inaugurated in 56 days, Obama wants Congress to have a stimulus package ready and waiting for him, one he warns will be "big" and "costly" but can "jolt" the struggling economy. Some estimates for the two-year plan range as high as $700 billon, but Obama hopes to offset some of the costs with significant spending cuts.

"Part of the charge to my economic team is to find areas where we can get a two-fer, where we're getting both a short-term stimulus and we're also laying the groundwork for long-term economic growth," said Obama.

It is this goal of ensuring immediate as well as lasting economic improvements that Obama has presented to his new financial leaders.

"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 stated.


Change is on the way, Obama promised, from dropping the national debt to reducing the role of personal friendships to eliminating wasteful spending.

"We are not going back to business as usual when it comes to our budget," he said.

Obama forecast future changes to address the rising cost of healthcare -- "one of the biggest, long-run challenges that our budget faces" -- and waste in the agricultural industry, citing a GAO report that farmers raked in almost $50 million in crop subsidies from 2003-2006, despite earning more than the $2.5 million cut-off.

In making these changes, Obama assured that personal friendships will not be a factor. Andy Shaw of ABC News' Chicago affiliate WLS-TV pointed out that state and local governments are hurting and many friends of Mr. Obama's from his days in the Illinois state legislature need help.

"I want to be clear: friendship doesn't come into this," Obama replied. "That's part of the old way of doing business. The new way of doing business is, let's figure out what projects, what investments are going to give the American economy the most bang for the buck, how can we protect taxpayer dollars so that this money is not wasted."

"Part of our job is to make sure that we are listening to what's happening on the ground, where the rubber hits the road, and not simply designing something out of Washington," he stated.


Following his convincing win over Republican nominee John McCain three weeks ago, Obama claimed he has been given a "mandate" by the American people, though he added that with up to 47 percent of the electorate voting for his opponent, humility was important as well.

"I don't think that 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 has gotten us into the fix we're in." he said. "In these challenging times, when we face both rising deficits and a sinking economy, budget reform is not an option -- it is a necessity. We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness or exist solely because of the power of a politician, lobbyist, or interest group. We simply cannot afford it."

"This isn't about big government or small government," he continued. "It's about building a smarter government that focuses on what works. That is why I will ask my team to think anew and act anew to meet our new challenges."

"I think what the American people want more than anything is just common-sense, smart government," Obama said. "They don't want ideology, they don't want bickering."

The President-elect promised to work together with Republicans in a bipartisan fashion, noting that "wisdom is not the monopoly of any one party."

Obama will hold his third straight news conference Wednesday in Chicago, continuing to unveil his economic team -- which already seems to be helping the financial world, seeing as stocks shot up Friday when Geithner's name leaked and again Monday. Despite his newfound visibility, Obama noted that the Oval Office is not yet his.

"There is only one president at a time and that president is George W. Bush, who will be president until I'm sworn in January 20th," said the Illinois lawmaker.

The news conference setting was again split along Chicago baseball lines, with the south side of the room for the White Sox and north side for the Cubs. Unlike Monday, Obama divided his questions evenly, two for each faction of the room, at one point joking with one reporter whose seat was changed to reflect his sporting allegiances.

-- Jake Tapper & Matt Jaffe

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