As early as next week when President Obama has returned to Washington from his Hawaii vacation, he’s expected to name his next Treasury Secretary -- with all signs pointing toward the nomination of Jacob ‘Jack’ Lew.
Lew possesses the impeccable resume of a long-time Washington insider. He now works as the White House chief-of-staff and has earned the trust of the president in a very short period of time for no-drama approach and deep knowledge of fiscal matters. His previous tours of duty include stints in two administrations as budget director and as a former top policy advisor to the Democratic Speaker of the House Tip O’Neill.
Any major landmark budget legislation of the past 20 years has involved Lew. He helped to cut the 1997 balanced budget deal under President Clinton and the 1983 Social Security legislation, which has kept the entitlement program solvent for the past two decades.
The Treasury Secretary job would just be yet another career progression for a man known as a super staffer. Still, that doesn’t mean it will be glamorous. In this hyper-partisan climate, in fact, it’s far more likely that the Treasury Secretary position will be a thankless one.
Sure, the final fiscal-cliff deal averted a possible recession and dive in the stock market, but it also created a series of mini-cliffs that the federal government must contend with this spring: from the delay of the across-the-board spending cuts known as the sequester to the debt ceiling fight in February to the government funding war in March. All of this will make the fiscal cliff fight seem like child’s play, especially since Republicans have promised to enact real spending cuts this spring.
Lew will get sucked into these negotiations, just as Geithner took blows the past four years over the stimulus package, the auto bailout, the president’s annual budget proposal, and you name it. Just watch C-Span reruns of any Geithner appearance on the Hill, where Republicans tried to paint him and the administration as out-of-control spending liberals who caused some yet-to-arrive debt crisis and who put the country on a path to economic despair.
Geithner always gave it back to them with sharp-tongued responses. That doesn't mean the verbal sparing was fun, though, especially when it was such a reoccurring motif.
The Republicans on the Hill, like Chairman Dave Camp of the House Ways & Means Committee, also seem quite intent on pursuing tax reform in 2013. Camp reiterated this goal on the night the House (barely) passed the fiscal cliff deal. Tax reform will force the administration vis-à-vis Lew to argue over tax policy and the future of the tax code with the House GOP; we know how frequently those two sides agree on policy. While both have said they want to lower the corporate tax rate, that’s really where the similarities end.
Not to mention, House Republicans strongly dislike Lew. GOP members and staffers negotiated with him on the debt ceiling deal in the summer of 2011: an experience that left them with deep-seated, raw feelings of disdain for a man they view as condescending, too liberal, and unable to get to “yes” in a negotiation.
“Always trying to protect the sacred cows of the left” was the way Speaker Boehner’s former chief-of-staff, Barry Jackson, described Lew in Bob Woodward’s book, The Price of Politics. Republican sources in the book also characterized Lew as someone “who tried to explain why Democrats’ view of the world was right and the Republicans’ wrong.” That bad blood still exists.
The upside for Lew as the potential next Treasury Secretary is that the position encompasses both domestic and international portfolios. Inside the U.S., the fiscal policy battles seem inevitable and intractable. But globally, the country’s economy is still seen as a safe haven given Europe’s woes with high deficits and deep unemployment and serious pension obligations.
Inside D.C., Lew could face what amounts to a congressional firing squad and a never-ending calendar of budget battles, but he’ll have the global stage to take a refuge. It’s one of the beauties of a post at Treasury. You’ll always have Europe.