Obama names overseer

Killefer appointed chief performance officer to cut waste

January 08, 2009|By Peter Nicholas and Maura Reynolds | Peter Nicholas and Maura Reynolds,Los Angeles Times

WASHINGTON -

Pressing his bid for a fresh burst of government spending, President-elect Barack Obama announced yesterday that he is creating a new position: a chief performance officer to kill dubious government programs and ensure that taxpayer money is not wasted.

The choice of Nancy Killefer to head the office is part of an effort to pass an economic stimulus package estimated at up to $775 billion. By sending a message that he will not tolerate inefficiency, Obama hopes to win over Republican members of Congress who say the stimulus bill should not be larded with unneeded projects.

"I intend to make sure we have unprecedented measures to ensure that taxpayers keep track of how this money is spent," Obama said.

Obama has devoted most of his first full week in Washington as president-elect to a two-track effort to pass his stimulus bill. Behind the scenes, he and his advisers are speaking with members of Congress about the exact size of the package and where the money will go.

But he also is attempting to build support for the first major legislative initiative of his presidency, launching a public relations push that moves today to George Mason University in Virginia, where Obama will deliver a speech calling for passage of the stimulus package.

Obama contends that injecting hundreds of billions of dollars into the economy is necessary to reverse a recession punctuated by a contracting economy, falling housing prices and rising unemployment. He concedes that his program will inflate a federal budget deficit already at $1.2 trillion. Doing nothing, he says, risks "red ink as far as the eye can see."

Meanwhile, the Congressional Budget Office released a report yesterday showing that the combination of falling tax revenues and government bailouts have created a projected deficit of $1.2 trillion that would be more than double last year's record deficit of $455 billion.

Nigel Gault, chief U.S. economist at IHS Global Insight, an economic consulting firm in Lexington, Mass., noted that the $1.2 trillion projection is roughly 8 percent of the gross domestic product - a magnitude that is "off the charts."

As a percentage of GDP, the projected deficit would be the worst since World War II.

Only weeks ago, congressional leaders talked of approving the stimulus package by Inauguration Day. But the drive for quick action has become entangled in Washington politics. The emergency measure that Democrats hoped to have on Obama's desk when he entered the Oval Office might not clear Congress until mid-February at the earliest.

Economists warn that if it comes too late or loses focus, the stimulus package could fall short of rescuing the economy.

To ease fears that his stimulus plan would drive the nation deeper into debt, Obama vows a rigorous commitment to rein in costs by setting up a "performance office." It will be led by Killefer, a partner at the management consulting firm McKinsey and Co. and former Treasury official in President Bill Clinton's administration.

But Obama also is pledging to take certain political risks that past presidents have avoided. Asked if he will consider cuts in two popular but costly programs - Medicare and Social Security - Obama said he will evaluate both as he strives to reduce the deficit. Announcements about his plans for Medicare and Social Security could come in February.

Obama's expressions of concern about the deficit appear to have softened opposition.

House Minority Leader John A. Boehner of Ohio said: "I was pleased to hear the president-elect say yesterday that we need to stop just talking about our national debt and confront it."

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