WASHINGTON – President Obama will nominate White House chief of staff Jack Lew to be his second-term secretary of the Treasury, turning to one of Washington’s most knowledgeable budget experts to manage prickly fiscal negotiations with Congress and steer the still-shaky national economy.
Lew’s nomination, expected today, accelerates the overhaul of Obama’s top advisers, with new leaders at the Pentagon, State Department, Central Intelligence Agency and Labor Department. Obama also must replace Lew with a new chief of staff, and that could have a ripple effect through the West Wing’s senior ranks.
A day ahead of the formal announcement, White House Press Secretary Jay Carney praised the expected nominee: Over the past more than quarter of a century, Jack Lew has been an integral part of some of the most important budgetary financial and fiscal agreements, bipartisan agreements in Washington.
Lew, 57, would bring to Treasury a mastery of federal budget mechanics, honed during two stints as director of the Office of Management and Budget. While running OMB during the Clinton administration, Lew helped negotiate a balanced budget agreement with Congress, something that has eluded Washington ever since.
Lew’s budget background could help shape the Obama administration’s strategy in talks with congressional Republicans over the federal debt ceiling. GOP lawmakers are expected to demand deep budget cuts as the price for agreeing to raise the debt limit, which is expected to be reached sometime in February.
His résumé is tailor-made for what is most important right now, said Diane Swonk, chief economist at Mesirow Financial in Chicago. On Wall Street, Lew was managing director and chief operating officer of Citi Global Wealth Management and then Citi Alternative Investments. At the start of the Obama administration, he oversaw international economic issues at the State Department.
Lew has long been considered the favorite to replace current Treasury Secretary Timothy Geithner. The last original member of Obama’s economic team, Geithner plans to leave the administration in late January.
Lew’s nomination will do little to quiet questions about diversity in Obama’s second-term leadership team. The president’s other nominees are all white men: Sen. John Kerry, D-Mass., for the State Department, former Republican Sen. Chuck Hagel to lead the Pentagon and White House counterterrorism adviser John Brennan for the CIA’s top job.
Like other Obama nominees for second-term Cabinet posts, Lew’s selection underscores how the nation and the world have changed since the president took office four years ago.
Geithner brought to the job deep knowledge of Wall Street and financial markets at a time when the administration was seeking to shore up the big banks and pull the economy back from the brink of a new depression. With the economy now stabilized, if still sluggish, Obama’s second term is likely to focus more on battles with Congress over spending cuts and the debt.
Lew is expected to be easily confirmed by the Senate, though at least one prominent Republican has already stated his opposition.
We need a secretary of Treasury that the American people, the Congress, and the world will know is up to the task of getting America on the path to prosperity, not the path to decline, said Alabama Sen. Jeff Sessions, the top Republican on the Senate Budget Committee. Jack Lew is not that man.
His blend of experiences appeared to give Lew an edge over other potential candidates for the Treasury job, particularly given the secretary’s key role in coordinating with European allies on the continent’s debt crisis.
Geithner is handing off a European situation that is still a powder keg, said Brian Bethune, an economics professor at Gordon College in Wenham, Mass. It is still the biggest threat out there facing the U.S. economy and the global economy.
Lew, a pragmatic liberal and Orthodox Jew who doesn’t work on Saturdays, is well-liked in Washington by both Democrats and Republicans and respected by staffers at the White House, where he has served as chief of staff since January 2012.