President-elect Barack Obama is planning to add hundreds of billions of dollars in economic stimulus spending to the budget deficit, but he said Tuesday he is also looking to slash programs that have outlived their usefulness. 

Speaking from his lectern at "The Office of the President-Elect" in Chicago, Obama introduced more members of his economic team and said the economic crisis demands that the U.S. invest in a series of measures to help save and create 2.5 million jobs and provide relief to middle-class families. All the while, he said, the economic gurus are also going to find ways to shed spending that is no longer necessary. 

"In these challenging times, when we are facing both rising deficits and a sinking economy, budget reform is not an option. It is an imperative," Obama said. "We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness or exist solely because of the power of a politician, lobbyist or interest group. We simply cannot afford it. 

"This isn't about big government or small government. It's about building a smarter government that focuses on what works," he said. 

Like others before him, the president-elect insisted that he would bring to Washington a "new way of doing business."

Obama announced that he has named Peter Orszag as his Office of Management and Budget chief -- the role of chief adviser on spending and taxes. Orszag, 39, is serving a four-year term as head of the Congressional Budget Office.

Robert Nabors was named deputy director of OMB. He currently serves as the 13th clerk and staff director of the House Appropriations Committee.

On Monday, Obama named New York Federal Reserve President Tim Geithner to be treasury secretary and former Treasury Secretary Lawrence Summers to be director of his National Economic Council.

Obama said his budget team is being assembled "to make sure that we are proceeding on projects and investments based on national priorities and not based on politics. ... Friendship doesn't come into this. That's part of the old way of doing business. The new way of doing business is let's figure out what projects, what investments are going to give the American economy the most bang for the buck and how can we protect taxpayer dollars so this money is not wasted."

He repeated a campaign pledge that the team would go through the federal budget "page by page, line by line -- eliminating those programs we don't need and insisting that those that we do need operate in a sensible, cost-effective way."  

Obama said his "first class team" was developed to prevent his administration from stumbling into an economy hobbled by waste and misdirected priorities.

"We don't want to continue programs that aren't working in making people healthier. The same is true for education and the same is true for defense and social spending," he said.

Obama added that he is counting on cooperation from all sides, since everyone is hurting as a result of the economic downturn. He noted that he has gotten "bipartisan accolades" for the economic team that he's put together. 

"I don't think that there's any question that we have a mandate to move the country in a new direction and not continue the same old practices that have gotten us into the fix we're in," he said.