New OMB team offers continuity in a turbulent time

Recent changes at the top of the Office of Management and Budget have come at a frantic time, as the office prepares President Obama's budget and sells his proposal to streamline six federal commerce and trade agencies.

The president's decision to name Chief Performance Officer Jeffrey Zients as acting OMB director is seen by observers as a bid for steadiness at a time of fierce partisan warfare in Washington.

Departing OMB Director Jack Lew, whom Obama recently named as chief of staff, used a Jan. 17 blog to declare that the elevation of Zients and deputy OMB Director Heather Higginbottom means the agency "will have strong continuity of leadership."

Lew praised Zients' "deep knowledge of the federal government" and his ability to apply private sector lessons to government.

Similar praise was voiced by Dan Gordon, associate dean for government contracts law at The George Washington University School of Law who recently left OMB, where he served as administrator of the Office of Federal Procurement Policy.

"Jeff Zients is a quick study and has the benefit of having served as acting director already in the months before Jack Lew was confirmed," Gordon said. "Also, his leadership and drive, as demonstrated in the trade- [and] commerce-related reorganization effort, obviously earned him kudos."

The fact that neither of OMB's top leaders has a budget background is a departure from tradition that already has prompted criticism from some Republican lawmakers.

Zients, who was confirmed by the Senate in June 2009 as OMB deputy director, came to government with two decades of experience as a chief executive officer, management consultant and entrepreneur. He served as CEO and chairman of the Advisory Board Co. and the Corporate Executive Board, both launched by David Bradley, chairman of Government Executive's parent, Atlantic Media Co.

After beginning his career at Bain & Co. and Mercer Management Consulting, Zients founded an investment firm specializing in health care services and a nonprofit called the Urban Alliance Foundation to help disadvantaged youth, according to the OMB website. When the Washington Nationals baseball team was up for bids by prospective owners, Zients was a member of a partnership that made a play for it.

Higginbottom was confirmed as OMB deputy director by the Senate in October 2011, following a contentious hearing last March that focused on her relative lack of budgetary experience. She had been serving as counselor to the OMB director after coming over from a post as deputy assistant to the president and deputy director of the White House Domestic Policy Council from January 2009 to January 2011. She is a veteran of the Senate staffs of Obama when he represented Illinois and of John Kerry, D-Mass., and also has worked on recent Democratic presidential campaigns.

Though the elevation of Zients has elicited few if any complaints, the appointment is unorthodox. "A management specialist is very unusual, and Zients is not the obvious choice by virtue of his specialty," said Larry Haas, a journalist-turned-public affairs consultant who was communications director at OMB during the Clinton administration. The OMB director has typically "been a person knee-deep in the budget side rather than management, no matter how interested in management the director may be," he said. "But OMB will do fine in helping the president make important policy decisions on taxes and spending and getting those issues appropriate airing to senior White House staff."

Haas noted that Lew is the third OMB director to be elevated to the broader and more powerful chief of staff slot, the others being Josh Bolten in the George W. Bush administration and Leon Panetta (now Obama's Defense secretary) under President Clinton. More than ever, "budget numbers drive policy in Washington," he added, and fiscal policy is so central to the president's agenda and to politics that budget expertise is of great value." Increasingly, "presidents and budget directors are spending time together, so they bond," he adds.

Sam Rosen-Amy, a federal fiscal policy analyst at the nonprofit OMBWatch, predicted Zients would "keep a low profile as Lew did." He's likely to continue Lew's conciliatory style, which contrasted with that of Obama's first budget director, Peter R, Orszag, "who was high-profile and demanding of staff," Rosen-Amy said. The reason Obama chose the already confirmed Zients and made him acting rather than permanent, he added, is that choosing an outsider would prompt the Republican House to "use it as an excuse to have a brutal budget hearing regardless of who he nominates."

One still unfolding question is who will replace Gordon as chief procurement administrator. Staff at OMB Watch, which generally considers the office under Obama to be more transparent than under Bush, have heard speculation that a possibility is Joseph Jordan, a onetime Small Business Administration associate administrator of government contracting and business development who came to OMB as an adviser in December. (An OMB spokewoman said no decision has been made filling that job.)

Whoever is picked as procurement chief likely will continue the agenda pursued by Gordon, described by Lew in December as including the "myth-busters' campaign" to promote more open communication between the government and industry. Gordon, he added, "helped agencies focus on strengthening their acquisition workforce, especially by providing training and driving the administration's commitment to tightening oversight of contractors, whether through a reinvigorated suspension and debarment process to deal with the 'bad actors' whose misdeeds no longer go unpunished, or focusing on the contract management role of contracting officers' representatives, who help ensure that contractors deliver what they have promised, on time and on budget."

Sen. Jeff Sessions, R-Ala., greeted Lew's appointment on Jan. 9 with a skepticism that hinted at the kind of polarization OMB will encounter during the coming budget battles.

"The president's decision to elevate Mr. Lew to White House chief of staff -- after Lew and the White House attempted to mislead the country into believing the president's budget would not add to the debt -- raises continuing concerns about President Obama's willingness to candidly face the great challenge of our time," Sessions said in a statement. "This elevation also would appear, for the moment, to leave as his presumptive replacement OMB Deputy Director Heather Higginbottom -- a nominee noted for her lack of budget experience."

At last March's hearing, Sessions blasted Higginbottom, saying her "verbal and written testimony simply underscore that she lacks the background, independence and strength of commitment necessary to effectively serve in this post.

"She tried to justify the administration's irresponsible presentation of its budget and seemingly failed to grasp the gravity of our country's crushing debt," he said. "Indeed, in her testimony, she has revealed that she sees the budget as a policy document, not a control on the natural tendency of government to expand."

In defending her qualifications, Higginbottom told senators she had "done a lot of policymaking . . . I'm not an accountant. But the president's budget is an articulation of his policy agenda."