CHICAGO -- President-elect Barack Obama announced more members of his economic team and pledged a review Tuesday of all federal spending, saying "if we are going to make the investments we need, we also need to shed the spending we don't need."
Obama named Peter Orszag to head the Office of Management and Budget and named Rob Nabors as deputy director. At a news conference to announce the appointments, Obama again recited a familiar campaign pledge — to go over the federal budget "line by line" to cut wasteful spending and obsolete programs.
"Given the extraordinary circumstances that we find ourselves in, however, I think it is important for the American people to know we are putting together a first-class team, and that we don't intend to stumble into the next administration. We intend to hit the ground running," Obama said.
Orszag directs the Congressional Budget Office, which provides budget and financial analysis for Congress. Nabors is the staff director of the House Appropriations committee.
Obama used the opportunity to talk at length about federal spending, saying overhauling the budget process "is not an option. It's a necessity."
"This isn't about big government or small government. It's about building a smarter government that focuses on what works," he said.
The president-elect claimed he had been given a mandate by voters to "not continue the same old practices."
Obama's discussion of spending came a day after he said he would make improving the economy a higher priority than cutting the budget deficit. He called on Congress to approve an economic stimulus program soon after his inauguration — with an estimated cost of as high as $700 billion.
Tuesday, he said the deficit issue must be addressed "as soon as the recovery is well underway."
The president-elect said he would have additional appointments to his economic team in the coming days. Another news conference has been scheduled Wednesday.
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.
Leonard Burman, director of the nonpartisan Tax Policy Center, said Timothy Geithner and Lawrence Summers reflect both the need for a large-scale stimulus to the economy and for fiscal restraint once the economy shows signs of improvement.
"What's good about the appointments that Obama has made is that it suggests, in ways that his campaign never did, that he really understands this," Burman said.
Contributing: Associated Press; Randy Lilleston in McLean, Va.