President Obama will nominate his chief of staff and former director of the Office of Management and Budget, Jacob “Jack” Lew, as the next Treasury Secretary, Bloomberg reported today. Lew, who served at OMB during fierce negotiations over government shutdowns and the debt ceiling during Obama’s first term, will succeed outgoing Treasury Sec. Tim Geithner. He will inherit the department at a time when debates about the budget and debt ceiling are again raging.
Lew got his start in politics as a 12-year-old working for antiwar presidential candidate Eugene McCarthy, worked under former Sen. Paul Wellstone (D) as a professor at Carleton College, was an aide for progressive Rep. Bella Abzug (D) in New York, advised former Speaker of the House Tip O’Neill (D) in the 1980s, and has held numerous positions in both the Clinton and Obama administrations. Here is a breakdown of where he stands on the issues of the day:
Budget and Spending: Lew is known as a sharp budget negotiator, and he is largely credited with crafting the deal that averted a government shutdown in the spring of 2011. That deal hoodwinked Republicans into thinking they had brokered $100 billion in spending cuts, but Lew structured it so that most of the cuts were to money that wasn’t ever going to be spent anyway. The result: real spending cuts were only about $30 billion. Lew also helped build Obama’s American Jobs Act proposal, and he was an ardent critic of Republicans during and after the debt ceiling debacle last year, saying they were “willing to provoke a crisis” to get spending cuts.
Taxes: Lew drafted the proposal to pay for the American Jobs Act in part with increased taxes on the wealthy, and he was part of Obama’s team that dealt with negotiations over allowing the high-income Bush tax cuts to expire at both the end of 2010 and 2011. Defending Obama’s 2013 budget, which featured $1.3 trillion in tax increases, he said the increases hit people who “don’t need” tax cuts and are going to “have to pay their fair share.” He angered Republicans by calling for tax increases during the 2011 debt ceiling fight, an important note, since Obama is insisting on further tax increases as part of any deficit deal this spring.
Entitlements: Lew’s record on entitlements is mixed. He’s known as a fierce defender of safety net programs, especially Medicaid, and the New York Times reported that he “morphs into a warrior” while defending them in budget negotiations. When he drew up the plan that snookered Republicans on spending cuts, many of the programs he protected were those that benefit low-income Americans. But he also worked on former Speaker Tip O’Neill’s (D) staff when Democrats agreed to raise the Social Security retirement age in the 1980s, and he has supported similar changes to Medicare (he and Geithner were known as chief proponents of raising the Medicare eligibility age as part of negotiations).
Financial Regulation: Lew, a former Citigroup banker, has often cited his inexperience and lack of expertise when asked about financial regulations. Pressed by Sen. Bernie Sanders (I-VT), he testified that he did not “believe that deregulation was the proximate cause” of the financial crisis, though he said he “would defer to others who are more expert about the industry to try and parse it better than that.” An anonymous banker has said Wall Street would be “just fine” with Lew’s appointment. And though Lew has Wall Street experience — he worked for a unit that profited from subprime mortgages — he may not be cut from the same inside-Wall Street cloth as Geithner. The New Republic’s Noam Scheiber reported that Lew “never really took” to Wall Street. “He just wasn’t especially interested in being a banker or in the work bankers did,” Scheiber wrote. Geithner, who joined the administration straight from his work inside the financial crisis, was a fierce proponent of the Dodd-Frank Wall Street Reform Act. Where Lew will stand on those issues remains to be seen.
Assuming Lew is confirmed as the new Treasury Secretary, he will also get the privilege of having his incredibly illegible signature on every piece of printed currency, unless, like Geithner, he is forced to change it to something people can actually read.