Obama taps Jacob Lew to replace Peter Orszag as OMB chief
jacob lew President Obama announced Jacob Lew as his budget director on Tuesday, praising Lew's success in that role during the Clinton administration -- and calling on him to help replace the current deficit with Clinton era budget surpluses.
In tapping a key player at the State Department to replace Peter Orszag the Office and Management and Budget, Obama helped accelerate a personnel shuffle already underway. Secretary of State Hillary Clinton and senior State Department officials had resisted the move for weeks, a point Obama acknowledged in his introductory remarks at the White House, saying he had "had to trade a number of number one draft picks" to get Clinton to release Lew.
The appointment dovetails neatly with the new White House push to contrast the fiscal policies of the Bush years with those of the Democratic presidents before and since. Obama, under pressure to appear more in command of the sagging economy four months before the midterm elections, cast Lew's selection as part of a larger effort to get government spending under control. He compared the $236 billion surplus Lew left in 2001 at the end of his last term as OMB director with the $1.3 trillion deficit Obama found upon taking office in 2009.
Obama called on Lew to "use his extraordinary skill and experience to cut down that deficit and put our nation back on a fiscally responsible path."
Lew, 54, a former advisor to House Speaker Tip O'Neill, has been serving as deputy Secretary of State for Management and Resources -- a relatively new position, and one that made him central to several civilian efforts in global hot spots. Among other things, Lew has managed the personnel and money sides of the civilian surge in Afghanistan, a big push in aid to Pakistan and the transition to civilian control in Iraq.
Widely admired as both a manager and policy wonk, Lew is expected to win swift Senate confirmation. He is credited with helping launch President Clinton's national service program and, in 1997, providing critical expertise as the administration struck a deal to balance the budget.
Secretary Clinton, in a letter to State Department employees on Tuesday, described the appointment of her deputy as "bittersweet."
"While I was hoping never to have to replace Jack, the President and our country need his leadership at OMB," Clinton wrote. "His prior experience in the Clinton Administration helping to take America's budget from deficit to surplus makes him uniquely prepared to lead at this time."
Lew joined OMB in 1994 and eventually was nominated to be director in 1998, serving in that capacity until the end of the Clinton Administration. Lew's tenure at OMB was marked by significant reductions in the federal deficit, an experience that would be particularly valuable as the Obama administration grapples with record deficits.
If confirmed, Lew would face the gargantuan challenge of crafting a budget plan by February that reduces the federal deficit to 3 percent of the size of the economy by 2015. With the current deficit at $1.3 trillion -- above 9 percent of the economy -- accomplishing that task won't be easy. Tax hikes, as well as cuts to popular entitlement programs such as Social Security and Medicare, would likely have to be enacted.
However, Obama pledged during the campaign to protect families making less than $250,000 a year from new taxes. He has also proposed making permanent a series of tax cuts enacted during the Bush administration, which will expire at the end of this year, and preventing the alternative minimum tax from hitting millions of additional taxpayers.
The administration has yet to show how it can achieve the 3 percent target. Under the budget plan Obama unveiled in February, deficits would sink to no lower than 3.9 percent of the economy over the next ten years and begin to rise again by 2020.
The Congressional Budget Office has said that letting the Bush taxes expire, as well as finding a way to pay for the changes to the alternative minimum tax, would get the administration close to its goal.
The appointment dovetails neatly with the new White House push to contrast the fiscal policies of the Bush years with those of the Democratic presidents before and since. Obama, under pressure to appear more in command of the sagging economy four months before the midterm elections, cast Lew's selection as part of a larger effort to get government spending under control. He compared the $236 billion surplus Lew left in 2001 at the end of his last term as OMB director with the $1.3 trillion deficit Obama found upon taking office in 2009.
Obama called on Lew to "use his extraordinary skill and experience to cut down that deficit and put our nation back on a fiscally responsible path."
Lew, 54, a former advisor to House Speaker Tip O'Neill, has been serving as deputy Secretary of State for Management and Resources -- a relatively new position, and one that made him central to several civilian efforts in global hot spots. Among other things, Lew has managed the personnel and money sides of the civilian surge in Afghanistan, a big push in aid to Pakistan and the transition to civilian control in Iraq.
Widely admired as both a manager and policy wonk, Lew is expected to win swift Senate confirmation. He is credited with helping launch President Clinton's national service program and, in 1997, providing critical expertise as the administration struck a deal to balance the budget.
Secretary Clinton, in a letter to State Department employees on Tuesday, described the appointment of her deputy as "bittersweet."
"While I was hoping never to have to replace Jack, the President and our country need his leadership at OMB," Clinton wrote. "His prior experience in the Clinton Administration helping to take America's budget from deficit to surplus makes him uniquely prepared to lead at this time."
Lew joined OMB in 1994 and eventually was nominated to be director in 1998, serving in that capacity until the end of the Clinton Administration. Lew's tenure at OMB was marked by significant reductions in the federal deficit, an experience that would be particularly valuable as the Obama administration grapples with record deficits.
If confirmed, Lew would face the gargantuan challenge of crafting a budget plan by February that reduces the federal deficit to 3 percent of the size of the economy by 2015. With the current deficit at $1.3 trillion -- above 9 percent of the economy -- accomplishing that task won't be easy. Tax hikes, as well as cuts to popular entitlement programs such as Social Security and Medicare, would likely have to be enacted.
However, Obama pledged during the campaign to protect families making less than $250,000 a year from new taxes. He has also proposed making permanent a series of tax cuts enacted during the Bush administration, which will expire at the end of this year, and preventing the alternative minimum tax from hitting millions of additional taxpayers.
The administration has yet to show how it can achieve the 3 percent target. Under the budget plan Obama unveiled in February, deficits would sink to no lower than 3.9 percent of the economy over the next ten years and begin to rise again by 2020.
The Congressional Budget Office has said that letting the Bush taxes expire, as well as finding a way to pay for the changes to the alternative minimum tax, would get the administration close to its goal.