U.S. President-elect Barack Obama picked an official to manage the huge
government budget Tuesday, while top Bush administration officials
outlined yet another program to boost the battered economy.
named Peter Orszag to head the Office of Management and Budget, (OMB),
ordered him to scour government spending and save billions of dollars
by getting rid of programs that have outlived their usefulness.
The president-elect said budget reform is vital at a time when the
economy is slumping and deficits are rising. Mr. Obama's proposals to
stimulate the economy may increase that deficit.
Earlier, Bush administration officials announced new help for the
troubled U.S. housing market, which helped spark the current economic
The government will buy up hundreds of billions of dollars in
mortgage-backed securities in an effort to make more loan money
available to prospective home buyers.
U.S. Treasury Secretary Henry
Paulson said the program also is intended
to boost faltering consumer spending, with a new loan program to help
companies that issue credit cards, make student loans, or finance
New economic reports painted a mixed picture of the world's largest
economy Tuesday. A measure of all the goods and services produced in
the United States shrank half of one percent between July and
September, which is significantly more than first thought.
Economists say the GDP shrank because consumer spending fell at the
steepest rate in decades.
That is a problem because consumer demand
drives about two-thirds of U.S. economic activity. A separate report
said U.S. consumer confidence improved in November, but was still at a
very low level. Meanwhile, a closely-watched index of home prices fell
at a record rate in September. The report (the S & P/Case Schiller
U.S. National Home Price Index) says home prices in the 20 largest U.S.
cities fell more than 17 percent in September compared to a year