Budget director to step down

This story has been updated from the original version.

White House budget chief Peter R. Orszag is expected to depart in the coming months, possibly as early as July, according to multiple news reports on Tuesday.

The director of the Office of Management and Budget, Orszag would be the first member of President Obama's Cabinet to leave the administration.

Orszag has become one of the key public faces of the administration's economic policy, appearing on everything from Sunday morning news shows to Comedy Central's The Daily Show.

During his tenure, the administration secured the $787 billion stimulus package and health care reform law, instituted a budget freeze for most civilian agencies and chartered a new path for federal procurement. He also helped prepare the president's first two budgets.

"He has a real analytical approach that is well-suited [for the position]," said Craig Jennings, director of federal fiscal policy at OMB Watch, a watchdog group. "These are going to be big shoes to fill."

White House spokesman Robert Gibbs confirmed Orszag's departure during a briefing Tuesday with reporters. Gibbs noted that Orszag decided to leave the position before the start of the next budget cycle.

Washington insiders had speculated for weeks that Orszag would resign this year. He is planning to get married in September and recently had a child.

Before arriving at OMB, Orszag was director of the nonpartisan Congressional Budget Office. He served in several roles during the Clinton administration, including as senior economist on the President's Council of Economic Advisers and as special assistant to the president for economic policy.

It is unclear what he plans to do next although some have speculated he could be headed to a Washington think tank.

Lawmakers credited Orszag for his accomplishments, but stressed that the administration must choose the next director wisely.

"Peter Orszag has served his country at a time of unprecedented budgetary and economic peril, facing challenges beyond the norm for OMB and those who lead it," said Sen. Joe Lieberman, I-Conn., chairman of the Senate Homeland Security and Governmental Affairs Committee. "He has been instrumental in putting together a major recovery package, without which we might be facing a much worse situation today."

Rep. Edolphus Towns, D-N.Y., chairman of the House Oversight and Government Reform Committee, urged Obama "to appoint a budget director with the necessary background to manage the fiscal challenges facing the federal government and the nation."

Speculation ramped up immediately on Tuesday about possible replacements at OMB. Gibbs told reporters that the White House was looking at a "number of very talented candidates."

Reports have focused on three choices: Gene Sperling, senior adviser to Treasury Secretary Timothy Geithner and a former top economic official during the Clinton administration; Laura Tyson, an economic adviser to Obama and chairwoman of the Council of Economic Advisers from 1993 through 1995; and Rob Nabors, Orszag's former deputy at OMB who recently left the agency to work with White House Chief of Staff Rahm Emanuel.

Management observers said the next director must balance heavy budgetary lifting with the political wherewithal to navigate Congress, federal agencies and special interest groups.

"The director must have the ability to work well, no matter what party is in charge," said John Kamensky, senior fellow with the IBM Center for the Business of Government.

Jennings, meanwhile, wants the next budget chief to "push the envelope with transparency and open government."

In many respects, Orszag's recent actions have charted the path for his successor. In just the past few weeks, the administration has issued a blizzard of memos and directives, calling on federal agencies to trim their budgets for fiscal 2012 by 5 percent; dispose of surplus property; reduce improper payments; and check a new Do Not Pay list to verify the status of recipients of federal funds before remitting payments.

"It looks like the agenda or the path for budget preparation has been put into place," Kamensky said. "The question at this point is how they follow through on all of them."

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