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Obama names Orszag OMB chief

CHICAGO, Nov. 25 (UPI) -- U.S. President-elect Barack Obama Tuesday picked Peter Orszag to head the Office of Management and Budget, saying the economic crisis requires "ingenuity."

Obama praised Orszag, the director of the Congressional Budget Office, as someone who shares his philosophy of making government work smarter and who recognizes the old ways of doing business in Washington must come to an end.

"The old ways of Washington simply cannot meet the challenges of today and tomorrow," Obama said.

"I am confident we are going to rise to meet this challenge (to resolve the current economic crisis) if we realize Wall Street cannot thrive as long as Main Street is struggling, if we're willing to summon a new spirit of ingenuity and determination and if Americans of great intellect are willing to serve in our government in its hour of need."

Tuesday marked the second straight day Obama focused on the economic arm of his administration. Monday, Obama named New York Federal Reserve Bank chief Timothy Geithner as treasury secretary, former Treasury Secretary Larry Summers as his chief economic adviser, economics Professor Christina Romer, an expert on the Great Depression, as the head of the Council of Economic Advisers and Melody Barnes as director of the Domestic Policy Council.

Obama also named Rob Nabors as Orszag's deputy.

Obama: No more business as usual

CHICAGO, Nov. 25 (UPI) -- U.S. President-elect Barack Obama promised Tuesday to go through the federal budget line-by-line to determine how better to spend tax dollars.

Obama, during a news conference to announce Peter Orszag as his choice for director of the Office of Management and Budget, said the current economic crisis demands immediate intervention.

"If we are going to make the investments we need, we also have to be able to shed the spending we don't need," he said. "Budget reform is not an option. It's a necessity. We cannot sustain a system that bleeds billions for programs that have outlived their usefulness."

Obama said energy and healthcare reform can be used as tools to jump start the economy.

"We have to make sure those investments are wise, have to make sure we are not wasting money," Obama said.

He said special interest tax breaks and corporate subsidies hidden in the current budget won't be allowed to survive.

"We are not going back to business as usual when it comes to our budget. One of the concerns people may have, you've got this large stimulus package the new president is proposing and members of Congress are talking about, is this going to be more of the same when it comes to was spending. The answer, I want to be very clear is no," Obama said.

Obama said he is unveiling his economic team now to assure Americans he won't be stumbling into the White House and he called on Democrats and Republicans to work together.

"Wisdom is not the monopoly of any one party," he said, adding that Americans are sick of the partisan bickering and sniping and have no interest in ideology.

"They want action and they want effectiveness," Obama said.

European Commission works on recovery plan

BRUSSELS, Nov. 25 (UPI) -- The European Commission is working on a multifaceted economic recovery plan that would "mobilize all tools available," the panel's chief said.

The preliminary draft of the plan, which is to be revealed Wednesday, includes tax cuts and speeding up payments for infrastructure projects, the EU Observer reported Tuesday.

It would employ "all tools available -- fiscal, structural and regulatory -- both at European and national level(s)," commission chief Jose Manuel Barroso said Monday in Paris.

The plan is estimated to cost $169 billion, the EU Observer reported.

The preliminary draft of the plan includes increased spending for job-training programs and lower taxes for labor-intensive services and labor linked to low-wage workers, EU Observer said.

In addition, to provide a lift to the slowing construction sector, the commission is considering ways to "frontload the funding available to member states," said EU Commissioner for Regional Development Danuta Hubner.

A portion of the plan includes support for environmentally friendly goods and services and for innovations in the automotive sector, the report said.

Florida same-sex adoption ban struck down

MIAMI, Nov. 25 (UPI) -- A Miami child welfare judge ruled Tuesday that a Florida law banning adoption by same-sex couples is unconstitutional, observers said.

Miami-Dade Circuit Judge Cindy Lederman said the law had "no rational basis," WFOR-TV, Miami, reported. Her decision supported efforts by Frank Gill, 47, and his unidentified partner to adopt two young boys they have been raising as foster children since 2004.

The ruling is expected to set off a protracted legal battle pitting state child welfare officials against civil libertarians. Analysts told The Miami Herald that Lederman's decision is likely to be appealed to the Florida Supreme Court.

Witnesses for the Florida Department of Children and Families testified that children raised by same-sex parents are at significantly higher risk of mental illness and substance abuse than those raised by heterosexual couples. Such children, they say, also face social stigmas from a disapproving culture, the Herald reported.

But social scientists testifying for Gill said such children have no disadvantages compared with their peers.

Paulson: No timetable on TARP funds

WASHINGTON, Nov. 25 (UPI) -- U.S. Treasury Secretary Henry Paulson said there's no timetable for asking Congress for access to the rest of the $700 billion emergency bailout package.

At a news conference Tuesday to explain the latest moves taken by the federal government to shore up the economy, Paulson said there is no doubt new challenges will arise as the economic situation develops.

"We're continuing to work and develop and deploy TARP (Troubled Asset Relief Program) capital in programs that make sense," Paulson said. "We have no time line for drawing down the next (portion of the bailout package) but Congress set a process in place for doing that. We're focused on the programs and when the time is right we will avail ourselves of that congressional process."

Paulson said Tuesday's action by the Federal Reserve injecting $200 billion to buy mortgage-backed securities is aimed at supporting consumer lending.

"Nothing is more important to getting through this housing correction than the availability of affordable mortgage finance," he said, adding that the root cause of the current financial situation is the crisis in the housing market that spilled over into other areas

Reacting to a question about the drop in the gross domestic product and the biggest reduction in consumer spending in decades, Paulson said, "We are concerned and we are addressing it."

Paulson bristled at the suggestion the administration is actually in a holding pattern and plans to leave it to the next administration to handle the economic problems.

"I am going right to the end," Paulson said. "If you've got any doubt about that, I'll tell you, you are missing the point because we are working to deal with this situation in the most effective way possible. And we're going to continue to develop programs, deploy them when they're ready to go and work on having a very seamless transition here."

After fires, mudslides threaten So. Cal.

LOS ANGELES, Nov. 25 (UPI) -- Residents of three neighborhoods in Southern California were ordered to evacuate Tuesday because of the threat of mudslides.

The area in Yorba Linda is near Chino State Park, which was swept Nov. 15 by the Freeway Complex Fire. The blaze burned the park's vegetation, leaving nothing to hold soil in place during a heavy rainstorm, which was forecast for Tuesday, the Los Angeles Times reports.

"These burn areas, it's not like sand, it's very loose ash, and as the rain comes down, and especially if it's a lot of rain all at once, the first 6 inches of soil will sop up the rain and it will just come crashing off of there, like an avalanche," Stuart Seto, a forecaster with the National Weather Service in Oxnard, Calif., told the Times. "What makes it so bad is that it's not just water anymore, it's mud, debris. It carries a lot of stuff and weight and that's what can wipe out houses, cars and push things around."

Flash flood warnings were in place for much of Southern California in areas around the sites of the wildfires.