Gates 'to stay as Pentagon chief'

US Defence Secretary Robert Gates is to stay on in charge of the Pentagon when Barack Obama takes office as president, according to US media reports.

Mr Gates was nominated to the role by President George W Bush in 2006 and has overseen a change of strategy in Iraq.

ABC News and Politico.com quoted officials saying Mr Gates would remain in the job for at least the first year of Mr Obama's administration.

Mr Obama will give his third news briefing in as many days on Wednesday.

The focus will be the economy, an aide said. In the previous news conferences, Mr Obama - who takes office on 20 January - named the new leaders of his economic team.

ABC and Politico said that retired Marine Gen James Jones - a former commander of US and Nato forces in Europe - would be named as national security adviser.

Mr Obama is expected to announce his national security team early next week, Politico said, citing officials from both the Republican and Democratic parties.

Analysts had suggested that former CIA director Mr Gates, 65, might be asked to stay in his role because he was respected by both parties and would reflect a more bipartisan administration.

Mr Obama's office has not confirmed the reports.

It has been widely reported that former First Lady Hillary Clinton will form part of that team as Mr Obama's secretary of state.

Her office said last week that discussions were "very much on track" but that further reports were premature.

'Act anew'

Speaking in Chicago on Tuesday, the president-elect outlined more details of his plans to stimulate the ailing US economy, at the same time as making cuts to the budget.

He said budget reform was "imperative" and that the nation could not "sustain a system that bleeds billions of taxpayer dollars" on unneeded projects.

"We will go through our federal budget - page by page, line by line - eliminating those programmes we don't need, and insisting that those we do operate in a sensible cost-effective way," he said.

He said he would ask his economic team to "think anew and act anew" to meet new challenges and ensure it was not politics as usual when it came to spending in Washington.

Mr Obama announced the appointment of Peter Orszag, now head of the Congressional Budget Office, as his budget director.

He said Rob Nabors would be deputy director of the Office of Management and Budget.

Mr Obama praised both men as "outstanding public servants", and he described Mr Orszag as a man who, because of his current role, "knows where the bodies are buried".

Their appointment came a day after Mr Obama named other key economic advisers, among them New York Federal Reserve President Timothy Geithner as Treasury Secretary.

Meanwhile, the Federal Reserve said it was to inject another $800bn (£526.8bn) into the US economy in a further effort to stabilise the financial system.