Obama promises cuts in US budget

President-elect Barack Obama announced his top budget officials yesterday and promised significant spending cuts to partially offset a costly stimulus package that aims to revive the US economy.

As the top two officials at the Office of Management and Budget, Peter Orszag and Rob Nabors will closely examine federal spending to cut out wasteful programmes, Mr Obama said.

"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," Mr Obama said at his second press conference in as many days.

One obvious example: Crop subsidies to farmers who make more than $2.5 million per year, Mr Obama said.

Though he does not take office until January 20, Mr Obama's team of economic advisers are already working out the details of a two-year package to save or create 2.5 million jobs that could cost several hundred million dollars.

Mr Obama himself meanwhile has dropped his former low-profile approach and spoken directly to the American people with two news conferences this week. A third Obama press appearance is scheduled for 10:45 a.m. EST (1545 GMT) today. Bush administration officials continue to extend massive life support efforts to the ailing US financial system. The Federal Reserve yesterday announced a $600 billion programme to buy mortgage-related debt and securities, and a $200 billion programme to increase the availability of consumer debt, such as credit cards and auto loans.

Treasury Secretary Henry Paulson urged patience and said any effort will take time to work.

Mr Orszag now heads the Congressional Budget Office and Mr Nabors currently serves as staff director of the House Appropriations Committee. Both previously held White House positions under President Bill Clinton.

Their announcement follows on Monday's unveiling of New York Federal Reserve Bank President Timothy Geithner as Mr Obama's Treasury Secretary and Lawrence Summers, a former Treasury Secretary under Clinton, as director of his National Economic Council.

Mr Obama's aides are in contact with Bush administration officials, who said they would work closely with Mr Geithner and other incoming officials on any new rescue plans.

The scope of the economic crisis has widened since Mr Obama's November 4 victory over Republican John McCain, with auto companies warning that they are short on cash, unemployment numbers rising and the government bailing out yet another gigantic financial institution, Citigroup Inc.