Faced with a teetering US economy two weeks before taking office, Mr Obama said Americans will accept his proposed likely US$775-billion (S$1.14 trillion) stimulus plan only if they believe the money is being used wisely and to make smart long-term investments in public projects.

Even as he promised to fight waste and to make tough budgetary decisions, however, Mr Obama warned that the nation could face trillion-dollar deficits for years go come. Eight years ago the federal budget ran a surplus, and the deficit on Sept 30 was about US$455 billion.

Mr Obama told reporters at his transition office that his package will set a 'new higher standard of accountability, transparency and oversight. We are going to ban all earmarks, the process by which individual members insert projects without review'.

Details of the plan, which has yet to be drafted as a bill, will be available online, Mr Obama said, 'so the American people will know where their precious tax dollars are going and whether we are hitting our marks'.

He promised to make difficult choices and to 'eliminate outmoded programs and make the ones we do need work better'.

He did not specify which programs might be trimmed or eliminated.

Mr Obama said he will create an 'economic recovery oversight board' and bring 'a long overdue sense of responsibility and accountability to Washington'.

Previous presidents, of course, have promised to cut spending and waste, only to find the task far easier to describe than achieve.

Long-running criticisms of budgetary 'earmarks', lawmaker pet projects for home districts, are having an impact, however. Senate Budget Chairman Kent Conrad, a Democrat, said the stimulus package is likely to emerge from Congress free of them, even though he notes that some earmark projects have proven tremendously popular and effective over the years.

Mr Conrad agreed that trillion-dollar deficits are likely for a few years, and must be tolerated as the government pumps money into the badly weakened economic.

But the nation must confront long-term problems facing government retirement and health care benefits, he said, which will be 'very, very tough'.

Meanwhile, in comments to reporters, Mr Obama - while not officially confirming that he has picked Leon Panetta to head the CIA - praised the former chief of staff to President Bill Clinton as 'one of the finest public servants that we've had',

'He brings extraordinary management skills, great political savvy, an impeccable record of integrity,' Mr Obama said, adding - perhaps in answer to grumbling from some members of Congress that Panetta has no direct experience in intelligence-gathering - that 'he is somebody who obviously was fully versed in international affairs crisis management, and had to evaluate intelligence consistently on a day-to-day basis'.

News of his selection struck sour chords even from a longtime friend, incoming Intelligence Committee Chairwoman Sen. Dianne Feinstein, a Democrat. She complained about Panetta's lack of intelligence experience and Obama's failure to consult with her on the decision. Her committee will consider the nomination.

Feinstein said Tuesday that Obama had apologized to her for not notifying her ahead of time that Panetta was his pick.

With Democrats controlling the House and Senate, a version of Obama's stimulus plan seems likely to become law within a few weeks.

He has promised Republicans a say in the process, saying bipartisan support is vital.

As an Illinois senator for four years, Mr Obama obtained federal money for several local projects in large spending bills. But some lawmakers have abused the earmarking process, he said during his two-year campaign.

Mr Obama's proposed Economic Recovery Accountability and Transparency Board is to include members the administration deems relevant to helping the country rebound from the year-old recession, as well as inspector generals of agencies including transportation, defense, energy, education and health and human services.

Outside appointees with expertise in economics, public finance, contracting, accounting, auditing and other areas will advise the board. It will hold public meetings and issue financial reports to Congress on how the money is being used.

The new Web site will allow taxpayers to track where money is being spent while also showing the administration's estimate of how the money is affecting individual communities and the economy overall.

Mr Obama met on Monday with congressional leaders to seek backing for his economic plan. It could cost US$775 billion over two years, his advisers say, though they say they think add-ons by lawmakers could raise the price to $850 billion. Obama's advisers say an $850 billion plan could generate about 3.2 million jobs by the first quarter of 2011.

His proposal includes tax cuts of up to US$300 billion - including US$500 for most individuals and US$1,000 for couples if one spouse is employed - as well as more than US$100 billion for businesses.

Some US$77 billion would be used to extend unemployment benefits and to subsidize health care for people who have lost their jobs.

The rest would go toward job-creation projects such as rebuilding roads and bridges and toward long-term goals like alternative energy programs. -- AP