"We can no longer afford to sustain the old ways when we know there are new and more efficient ways to getting the job done," Mr. Obama said at a news conference at his transition headquarters.
The president-elect promised to scour the federal budget to eliminate what doesn't work and improve what does to "put government on the side of taxpayers and everyday Americans."
"Even in good times, Washington can't afford to continue … bad practices. In bad times, it's absolutely imperative that Washington stop them," Mr. Obama said.
Killefer, a director of a management consulting firm who previously served as an assistant secretary of the treasury under President Bill Clinton, will work with federal agencies to set performance standards and hold agency managers accountable for progress.
Mr. Obama pledged during the campaign to form a White House SWAT team of sorts - led by a chief performance officer who would report directly to him - to work with agency leaders and the White House budget office to improve federal programs and services.
Yet, even as he announced the post that's also aimed at spending taxpayer money more efficiently, Mr. Obama was spending his first week in Washington promoting his mammoth economic stimulus plan that could total as much as $775 billion over two years - much of the new spending aimed at creating jobs and stoking the troubled economy.
The Congressional Budget Office estimates the U.S. federal budget deficit will hit anfor the 2009 budget year, according to a Capitol Hill aide briefed on the new figures.
The aide says the CBO also sees a $703 billion deficit for 2010.
The dismal figures come a day after Mr. Obama warned of "trillion-dollar deficits for years to come."