President-elect Barack Obama says he must balance the need to spend money to stimulate the battered U.S. economy against worries about a ballooning budget deficit. Mr. Obama says to make this work, the government will have to operate much more efficiently.

Nancy Killefer looks on during a news conference at President-elect Obama's transition office Washington, 7 Jan. 2009

With that in mind, he appointed a "Chief Performance Officer" Wednesday and charged her with carrying out his campaign promise to examine every government program and get rid of those that do not work. She is Nancy Killefer, a former Treasury Department official and business efficiency consultant.

Mr. Obama spoke right after the economic experts who work for the U.S. Congress said the U.S. budget deficit will grow to more than $1.2 trillion this year.

The non-partisan Congressional Budget Office also said the economy will shrink more than two percent while unemployment soars above nine percent. Congressional Budge Office experts say the recession will probably end in mid-2009, with a slow recovery next year. Other economists predict that a report Friday will show U.S. unemployment already hit seven percent in December, with a net loss of half a million jobs for the month. 

Some information for this report was provided by AFP, AP and Reuters.