US President Barack Obama has said he will halve the budget deficit he inherited from the Bush administration by 2013.


The promise comes despite the huge amounts of money he plans to spend on his economic stimulus package.

Mr Obama also announced that he has put Vice-President Joe Biden in charge of overseeing the implementation of the $787bn (£540bn) package.

Former secret service agent Earl Devaney will be the plan's watchdog.

Mr Devaney's new job will be as chairman of the Recovery Act Transparency and Accountability Board and he will have to ensure that the stimulus funds are not wasted.

"He looks like an inspector, he's tough, you know he barely cracks a smile," the president said.

Healthcare funding

The president also said that $15bn would be released on Wednesday to help states pay their healthcare bills.

Some states have been struggling to pay for their Medicaid programmes, which provide healthcare for people on low incomes.

"By the time most of you get home, money will be waiting to help 20 million vulnerable Americans in your states keep their healthcare coverage," the president said.

Speaking to a gathering of state governors, he warned that if they wasted any of the stimulus funds, he would "call them out on it".

President Barack Obama sought to assure the nation Monday that he will address runaway government deficits, despite adding to the red ink now to battle the economic crisis.

After a four-hour "fiscal responsibility summit" with both Republican and Democratic lawmakers, Mr. Obama said he was paying attention to fiscal matters large and small. He also announced a summit on health care next week at the White House, to follow the unveiling of a budget Thursday that will make room for his proposal to offer Americans near-universal health care.

"We're not going to be able to fall back into the same old habits," Mr. Obama said. "The casual dishonesty of hiding irresponsible spending with clever accounting tricks, the costly overruns, the fraud and abuse, the endless excuses."

As Mr. Obama pours money into the economy in hopes of turning it around, he is also faced with making tough decisions on stemming the tide of red ink without strangling a future recovery. He told the nation's governors Monday that the federal government will have dispensed $15 billion by Wednesday to begin shoring up the states' strained Medicaid accounts. In a speech before a joint session of Congress Tuesday night, Mr. Obama will propose some specific spending cuts, as well as the additional spending he wants on energy, education and health care, White House spokesman Robert Gibbs said.

Some participants in Monday's summit concluded that the president will attempt to address the financial soundness of the Social Security system before moving on to other, more complicated problems, such as health-care costs. read more