Today, President Obama named the man he intends to nominate to replace outgoing OMB Director, Peter Orzag: Jacob Lew. Lew previously held the post under President Clinton and is currently serving as a deputy secretary of state for management and resources in the Obama Administration. Is this the change the Administration has been promising?
Who is Jacob Lew? Here are a few brief facts:
- Education: Harvard undergrad (1978), Georgetown Law (1983)
- 1979-1987: Domestic policy adviser to House Speaker Tip O'Neill
- 1993-1994: Special Assistant to President Clinton; helped craft health care reform legislation
- 1995-1998: Deputy Director of OMB
- 1998-2001: OMB Director under President Clinton
- 2001-2006: COO and EVP of New York University
- Currently: Deputy Secretary of State for Management and Resources.
As the Atlantic notes:
“During Lew's time at OMB under Clinton, the U.S. budget operated at a surplus for three consecutive years. Suffice it to say the next three years are going to be a little different. CBO projects the United States could add as much as $2 trillion to the debt in 2011, 2012 and 2013. Acting as budget director during the economic boom of the late 1990s was a bit like handling a state-of-the-art yacht in still water. Managing a budget that's bursting at the seams to keep the economy on track while half of Congress screams about the deficit will be more like windsurfing a South Pacific typhoon.”
Lew receives some praise for the Clinton-era fiscal plan (and the reported surplus) while he was leading the OMB. Of course, arguments can be raised that the Clinton surplus is a fallacy. Although CBO and historical tables show small on-budget surpluses in FY1998-2001, those numbers do not include intergovernmental debt which increased during that time negating the on-budget surplus. The gross federal debt increased in every one of those years. Regardless, many agree that the Clinton-era surpluses were primarily a result of the late-90’s economic growth, the stock market bubble, and dramatic decreases in defense spending- circumstances that are not present today. As Brian Riedl points out in the Wall Street Journal, we face a dramatically different economic landscape in the next decade. It remains to be seen if Lew will be up to the task.
