CHICAGO - BARACK Obama was turning his attention back to the country's economic crisis on Tuesday at a meeting with state governors, a day after introducing a strong-willed national security team headed by former rival Hillary Rodham Clinton and Bush administration holdover Robert Gates.

With the announcements on Monday, Mr Obama has finished naming the highest profile members of his administration seven weeks before taking office.

On Tuesday, Mr Obama was meeting in Philadelphia with the nation's governors who are seeking at least US$40 billion (S$61 billion) to help pay for health care for the poor and disabled and even more for infrastructure projects like road and bridge repair.

They are likely to get a sympathetic ear. The meeting in Philadelphia comes as Mr Obama and Democrats controlling Congress are fashioning economic recovery legislation that could cost US$500 billion or so. The measure is virtually certain to contain help for states struggling with slumping revenues and difficult budget cuts as the recession deepens.

National Governors Association Chairman Ed Rendell, a Pennsylvania Democrat, said the governors are also pressing for perhaps US$136 billion in infrastructure projects like road and bridge repairs in the legislation, which Democrats hope to have ready for Mr Obama's signature as soon as he takes office on Jan. 20.

'We're going to be talking about what the elements of an economic stimulus plan will be,' said Massachusetts Gov Deval Patrick, a Democrat with close ties to Obama.

For states, the recession has meant big reductions in tax revenues, which has forced 43 of the 50 states into budget deficits.

Governors have been forced to cut services, lay off workers and consider tax increases.

Such moves only make the economic situation more difficult, the governors say.

Mr Obama won praise Monday from Republicans as well as his fellow Democrats for his choices for his national security team who are seen as pragmatic, rather than ideological. But his picks have prompted questions about whether a Cabinet dominated by Washington veterans can deliver the overhaul of government Mr Obama had promised as a candidate.

The president-elect said he had not changed his mind about bringing most US combat troops home from Iraq within 16 months but added a cautionary note - he will consult with his military commanders first.

While his new team may be more centrist than many Obama supporters might prefer, he said the withdrawal timetable he emphasised in the presidential campaign is still 'the right time frame.' Mrs Clinton, as secretary of state, and Mr Gates, remaining as defence secretary, will be the most prominent faces - besides Mr Obama's own - of the new administration's effort to revamp US policy abroad.

Mr Gates has raised concerns about the militarisation of US foreign policy and has called for a greater emphasis on nonmilitary areas such as economic and political development.

At a Chicago news conference, Mr Obama also tapped top advisers Eric Holder as attorney general and Susan Rice as ambassador to the United Nations. He named Arizona Gov Janet Napolitano to be homeland security secretary and retired Marine Gen. James Jones as White House national security adviser.

Denouncing White House 'group think,' Mr Obama signalled a break from President George W. Bush's tendency toward an insular management style and go-with-the-gut diplomacy.

'The time has come for a new beginning,' said Mr Obama, flanked by flags on a stage with Vice President-elect Joe Biden and his six newest appointees. While Mr Gates will stay at the Pentagon, Mr Obama said the military's new mission will be 'responsibly ending the war in Iraq through a successful transition to Iraqi control.'

Mr Obama has now selected half his Cabinet, including the high-profile jobs at State, Defence, Justice and Treasury. A week ago, he named his economic team, led by Timothy Geithner as treasury secretary. And soon he plans to announce New Mexico Gov Bill Richardson as commerce secretary and former Senate Majority Leader Tom Daschle as health and human services secretary.

Mr Obama's picks suggest he is mindful of his own relative inexperience; most of the appointees have decades more experience in government than he does as a former one-term Illinois senator. The selections also reflect his long-voiced desire to invite divergent viewpoints to chart the best course for the country.

'I assembled this team because I'm a strong believer in strong personalities and strong opinions,' he said. 'I think that's how the best decisions are made. ... So I'm going to be welcoming a vigorous debate inside the White House.'

'But understand I will be setting policy as president,' he added. He said he will be responsible for 'the vision that this team carries out, and I expect them to implement that vision once decisions are made.' He said: 'The time has come for a new beginning, a new dawn of American leadership to overcome the challenges of the 21st century.'

Without naming Mr Bush or directly referring to what administration critics see as America's tarnished world image over the past eight years, Mr Obama called for a new strategy for dealing with global issues.

'We're going to have to bring the full force of our power, not only military but also diplomatic, economic, and political, to deal with those threats not only to keep America safe but also to ensure that peace and prosperity will exist around the world,' he said.

Referring to his security team, Mr Obama said: 'They share my pragmatism about the use of power and my sense of purpose about America's role as a leader in the world.' Asked by reporters about his choice of Mrs Clinton, who traded barbs with him and questioned his readiness for the presidency during the campaign, he praised her and shrugged off any suggestions of future problems.

He said of the New York senator, 'She possesses an extraordinary intelligence and toughness, and a remarkable work ethic. ... She is an American of tremendous stature who will have my complete confidence, who knows many of the world's leaders, who will command respect in every capital and who will clearly have the ability to advance our interests around the world.'

The former first lady repaid the compliment: 'I am proud to join you ... and may God bless you and our great country.' Likewise, Gates said he was 'honored to serve President-elect Obama.'

At the news conference, Mr Obama expressed sympathy for the victims of the terror attacks in Mumbai but twice declined to say whether the Indian government would be justified in pursuing terrorists in next-door Pakistan.

Mr Obama had drawn criticism during the campaign - including from Mrs Clinton - when he said the United States would be justified in pursuing Al-Qaeda terrorists in Pakistan if it had 'actionable intelligence'.

Mr Gates' appointment fulfilled a campaign promise by Obama, the naming of a Republican to his Cabinet.

Mr Holder, a former Justice Department official in the Clinton administration, led Mr Obama's vice presidential search, while Ms Rice was his top foreign policy adviser. Nr Jones, meanwhile, advised both Mr Obama and Republican presidential nominee John McCain during the campaign on national security issues. Last year he led a commission that advised Congress on progress in training Iraqi security forces.

Mrs Clinton, Mr Holder, Ms Napolitano and Ms Rice require Senate confirmation.

Mr Jones, as a White House official, does not. Nor does Mr Gates, already confirmed to his post. -- AP