Obama promises to halve deficit

President Obama was addressing a conference of state governors

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".