Obama Touts OMB and HUD Nominees as ‘Proven' Leaders, Managers

Pablo Martinez Monsivais/AP

The White House on Friday officially announced the nominations of Housing and Urban Development Secretary Shaun Donovan to take over as Office of Management and Budget director and San Antonio Mayor Julian Castro to lead HUD. News of the likely nominations broke last weekend.

President Obama praised Donovan for his work making HUD “smarter” and more efficient, using data to solve problems, reducing veterans homelessness, and leading recovery and rebuilding efforts from Hurricane Sandy.

“Shaun’s earned a reputation as a great manager, a fiscally responsible leader, and somebody who knows how the decisions we make here in Washington affect people’s lives all across the country,” Obama said. “That’s why I’m absolutely confident he will do a great job leading the Office of Management and Budget and help even more hard working Americans get ahead.”

If confirmed, Donovan would replace Sylvia Mathews Burwell, whom the Senate will soon consider to become secretary of Health and Human Services.

The president noted that as Donovan’s replacement at HUD, Castro would bring a successful record from his work revitalizing San Antonio. “He’s built relationships with mayors all across the country,” Obama said. “He’s become a leader in housing and economic development.”

The president expressed confidence both nominees would succeed, and asked the Senate to confirm them quickly. “They are proven leaders. They're proven managers. They're going to be effective. And most importantly, they’ve got huge heart,” Obama said. “They're involved in public service for the right reasons.”

Interest groups generally praised both picks as well, while offering some policy prescriptions.

Donovan, 48, became the nation’s 15th housing secretary in 2009 in the midst of the financial crisis, during which he worked to stabilize the Federal Housing Administration. His budget experience comes from his time as commissioner of the New York City Department of Housing Preservation and Development, including work with the New York City Acquisition Fund, a partnership with foundations and banks aimed at financing affordable housing.

Donovan’s arrival at OMB, said Donald Kettl, dean of the University of Maryland School of Public Policy and a nonresident senior fellow at the Brookings Institution, “would put one of the administration’s most-trusted hands at the helm of an agency that needs strong and consistent leadership. OMB has had a series of very impressive directors and acting directors, but none has remained long enough at the top to put a strong stamp on the powerful agency.”

Budget battles “will return with a vengeance after the midterm congressional elections, when the stakes will be incredibly high as the parties maneuver for the 2016 presidential race,” Kettl said.

OMB, he continued, “will need to define its role,” given that the Treasury Department and the West Wing “have had very powerful economic leaders and have sapped OMB’s traditional role. The administration badly needs an OMB chief who understands both the ‘B’ and the ‘M’ sides of the agency.”

Sheila Crowley, president and CEO of the National Low Income Housing Coalition, called the Donovan nomination “spectacular” and noted that the OMB chief is not usually well-versed in housing issues. “It’s only good for housing to have someone at OMB who knows housing, which is not usually the case,” she said. “At the end of the day, OMB is where a lot of these decisions get made.”

She added that an “elevated” Donovan would also be helpful in pressing for tax reform. “If we’re going to make a dent in it, we’d better do something about our excessive subsidy of home ownership,” she said.

Amit Narang, regulatory policy advocate at Public Citizen, said, “Donovan must ensure that OMB is keeping the Obama administration’s ‘year of action’ on track by reviewing and clearing environmental, health and safety regulations without delay. He should also institute long-overdue transparency reforms at OMB that make its process of regulatory review as transparent as possible.”

The moves would leave HUD in good hands as well, observers said.

Castro, 39, the brother of Rep. Joaquin Castro, D-Texas, has been mayor of San Antonio since 2009.

He “brought a sense of urgency to revitalizing the city’s urban core, including the underserved East Side of San Antonio, by initiating the ‘Decade of Downtown’ and approving a series of incentives to encourage inner city investment,” according to his city government website. “These efforts have spurred plans for the construction of more than 2,400 housing units in the center city by 2014.”

Castro is a rising political star. “He electrified the crowd at the Democratic National Convention, and his nomination as HUD secretary would make him the administration’s strongest and most effective Hispanic voice,” Kettl said. “As a mayor, he understands the needs of cities, which has always been essential for a job that is, at its core, the cities’ voice in the Cabinet. It catapults him with extraordinary speed to a level of strong national prominence. And it makes the Republicans’ job of winning the Hispanic vote that much tougher.”

Crowley said the low-income housing group’s Texas branch regards Castro as “having the right orientation and mind-set,” having come from a “civil rights family.” His work in San Antonio has been “focused on poverty and inequality,” she added. “But having said that, this is a real tough time for anyone to take on too much in housing given the steady decline in housing resources. It’s been a real struggle to maintain what we have.”

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