Obama taps ex-Clinton budget guru Lew to run his budget

McClatchy NewspapersJuly 13, 2010 

WASHINGTON — President Barack Obama reached Tuesday for the nostalgia of long-gone Clinton-era budget surpluses to soothe debt-weary voters, choosing a Clinton budget veteran to run the White House budget office.

Obama nominated Jacob Lew as his new director of the White House Office of Management and Budget, returning Lew to the job he held under former President Bill Clinton from 1998 to 2001.

Lew's tenure as budget director coincided with the last time the U.S. government had a budget surplus, a fact that Obama stressed Tuesday in a message aimed at voters who've grown anxious about soaring budget deficits and debt under Obama's watch.

"If there was a hall of fame for budget directors, then Jack Lew surely would have earned a place for his service in that role under President Clinton, when he helped balance the federal budget after years of deficits," Obama said at the White House.

"When Jack left that post at the end of the Clinton administration, he handed the next administration a record $236 billion budget surplus. The day I took office eight years later, America faced a record $1.3 trillion deficit."

The deficit has grown even more since he took office — to $1.41 trillion last year and $1.5 trillion this year, according to the Congressional Budget Office.

Under Obama's proposed spending plan, the deficit would decline to $1.34 trillion next year. It would go down to $724 billion in fiscal 2014, then start rising again, topping $1 trillion a year by 2019.

Obama's asked a bipartisan commission to find ways to restrain those deficits. That panel hopes to make recommendations in December.

Lew, 55, also will play a major role in drafting the president's next budget proposal due in February, and in helping the commission and the president sell deficit-cutting recommendations to Congress. He replaces Peter Orszag, who resigned.

Lew has a deep resume:

  • He was a top policy adviser to former House Speaker Thomas P. O'Neill. D-Mass., on a bipartisan agreement to shore up Social Security in 1983;
  • He was deputy White House budget director when Clinton and a Republican Congress reached a bipartisan pact in 1997 to balance the budget;
  • He was budget director when the government ran surpluses 1998-2001.

Despite his track record and Obama's assurances, times were vastly different in the late 1990s.

"He was budget director at a wonderful time for the budget," said Robert Bixby, director of the Concord Coalition, a budget watchdog group. "The Redskins brought back (ex-coach) Joe Gibbs, but it didn't mean they were gong to win the Super Bowl. Things change."

Indeed, the economy is much different now.

Then, a booming economy sent rising tax revenues to Washington. Now, slight improvements in the fiscal outlook — the current year deficit is $81 billion lower than last year's at the nine-month mark — don't change the fact that a deep recession sapped tax revenues while two wars and a recession prompted big increases in spending.

The political environment also is far different.

Then, after a nasty budget fight resulted in a shutdown of the government, a centrist Democratic White House agreed with a Republican Congress to rein in spending. Now, a liberal president is at odds with a Democratic Congress over spending, and Republicans oppose almost everything Obama proposes.

"He did a great job at OMB last time," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

"But he'll have to grit his teeth and show some negotiating skills. He faces two parties that are not yet showing a willingness to embrace the kinds of policies that are necessary."

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For more McClatchy politics coverage visit Planet Washington

McClatchy Newspapers 2010

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