Barack Obama defended his decision to pack his new Cabinet with veteran Washington insiders and former Clinton officials yesterday after a campaign in which he promised change.

The President-elect responded after naming the former Federal Reserve chairman Paul Volcker, a veteran of the Carter and Reagan Administrations, as the head of a new economic panel to stop “groupthink” infecting his inner circle of White House financial advisers.

There have been mounting concerns, particularly from the liberal wing of his Democratic Party, that Mr Obama has pivoted sharply to the centre-right with his choice of top Cabinet posts.

His main economic advisers have close ties to the Clinton White House and Mr Obama has already chosen Hillary Clinton to be his Secretary of State. His chief of staff, Rahm Emanuel, once served Bill Clinton, and more appointments still to be announced will include a slew of officials who served in the most recent Democratic Administration.

“What we are going to do is combine experience with fresh thinking,” Mr Obama said at his third press conference in as many days. He said he would be foolish, at such a “critical time in our history”, to pick people who “had no experience in Washington whatsoever”.

He added: “What I don’t want to do is somehow suggest that because you somehow served in the last [Clinton]administration you are barred from serving again.”

Mr Obama said he was forming an economic recovery advisory board, with Mr Volcker to head it, to give independent economic advice from outside the White House. “Sometimes policymaking in Washington can become a little bit too ingrown, a little bit too insular,” Mr Obama said. “The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking.”

Mr Obama said the board, which would report to him regularly, would be filled with individuals from diverse sectors of the economy and would be government outsiders, “to challenge some of our assumptions, to make sure that we are not just doing the same old thing all the time”.

Mr Volcker, 81, a legendary economic figure who has been a close adviser to Mr Obama, was appointed Chairman of the Federal Reserve by Jimmy Carter in 1979, a time of runaway inflation and high unemployment. He tamed inflation by raising interest rates; a highly controversial move, but one that was later credited with reviving the economy. He was retained in his post by President Reagan.

Mr Obama told anxious Americans that “help is on the way” for the beleaguered economy, but he again gave warning that it would take time to revive the nation’s fortunes.

He spoke as more grim economic news emerged, and as the federal deficit was revealed to be on course to surge to well over $1 trillion (£650 billion).

On Tuesday the Bush Administration announced that it was going to spend another $800 billion — in addition to the $700 billion Wall Street rescue package passed by Congress last month — to unclog credit markets and help homeowners threatened with repossession.

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