Transcripts

President-Elect Obama Shores Up His Economic Squad

SUSIE GHARIB: President-Elect Barack Obama is making deficit reduction a goal of his administration. But first, he' has to stabilize the economy. Today, Obama announced his budget director and is expected to name more of his cabinet tomorrow. As Stephanie Dhue reports, the president elect is balancing campaign promises with a dose of financial reality.

STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Facing a shrinking economy and growing deficits, Obama promises to meet the nation's economic crisis in a fiscally responsible way.

PRESIDENT-ELECT BARACK OBAMA: 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.

DHUE: Obama also renewed his pledge to go line by line through the budget to eliminate ineffective programs. To help get the job done he picked Peter Orszag for budget director and Robert Neighbors as deputy. Orszag now heads the Congressional Budget Office and has made health care reform a priority. Federal budget watcher Stan Collender says Orszag's knowledge is an advantage.

STAN COLLENDER, MANAGING DIRECTOR, QORVIS COMMUNICATIONS: Unlike a lot of previous budget directors who either knew nothing about the budget or only knew a little bit about it, Peter comes in and there will be no cabinet department that will be able to run rough-shod over him, at least for the first year or two, because he's going to know more about their numbers than they will.

DHUE: Obama singled out a farm subsidy program as an example of wasteful spending he would cut. The Government Accountability Office found farmers making more than the $2.5 million cut off still received $49 million in subsidies from 2003 to 2006. It's a small slice of a $3 trillion budget, but Kenneth Cook of the Environmental Working Group says reviewing every program sends a message.

KENNETH COOK, PRESIDENT, ENVIRONMENTAL WORKING GROUP: Part of this is psychological. In order for people to believe the government can do things right, you can't have these kinds of examples popping up all the time, without some strong response from the government.

DHUE: Obama also promised to have a long-term plan to reduce the deficit so the next generation isn't left with a mountain of debt. Obama will have more to say tomorrow and there's some speculation he could name New Mexico's Governor Bill Richardson as Commerce Secretary. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.