The pick of White House Chief of Staff Jacob Lew as the next Treasury secretary underscores President Obama’s intention to play tough with Republicans in a series of upcoming budget fights.
Over the next few months, Congress and the White House will face confrontations over the ceiling on the country's borrowing, automatic spending cuts known as “sequestration” and a stop-gap bill to fund the government. The next Treasury secretary will be a lead player in shaping the negotiating strategy.
“If you look at the kind of political and negotiating role that the Treasury secretary is going to have to play, especially this year, it’s understandable that the president would want to have someone in that position who has already been tested in the crucible and someone whose values and negotiating style the president knows and trusts intimately,” said William Galston, a former aide to President Clinton who is now a fellow at the Brookings Institution.
Lew fits that bill. The former aide to House Speaker Tip O'Neill has liberal instincts when it comes to budget policy but is steeped in experience in fiscal matters, having served as director of the White House Office of Management and Budget during both the Obama and Clinton administrations. As budget director in 2011, Lew was a pivotal player in that year's bruising battle over raising the debt ceiling and frustrated Republicans with what they saw as an unbending style. One GOP aide who spoke with National Journal last fall said that he found the budget chief to be presumptuous in the talks.
Obama, on the other hand, was criticized during the debt-limit fight by Democrats who saw him as too willing to compromise. Lew's selection should reassure Democrats on Capitol Hill, who were cheered by the tougher negotiating stance that the White House pursued in the fiscal-cliff battle of 2012.
During the cliff standoff, Obama played an “outside game,” traveling to states like Pennsylvania to rally public support for his positions with the aim of putting political pressure on Republicans. He is likely to continue that approach in the coming months.
In another sign of Obama's tougher approach to the upcoming budget talks, he has said he will “not negotiate" over the debt ceiling.
"We’re not going to play the same game that we saw happen in 2011,” Obama vowed at a news conference last month.
More recently, Obama took the podium just hours before the year-end deadline for averting the tax hikes and spending cuts that comprised the fiscal cliff and delivered a speech, flanked by middle-class Americans.
“Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone ... without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists, et cetera, if they think that's going to be the formula for how we solve this thing, then they’ve got another thing coming,” he said. “That's not how it’s going to work. We've got to do this in a balanced and responsible way. And if we're going to be serious about deficit reduction and debt reduction, then it’s going to have to be a matter of shared sacrifice—at least as long as I'm President. And I'm going to be president for the next four years, I think.”
The speech was criticized by Republican lawmakers for being too confrontational, particularly as a last-minute compromise was anything but certain and the economy appeared to be mere hours from suffering a significant blow. But it was indicative of the tough fiscal stance Obama vowed to take in his second term.
Lew is going to help him keep that promise. His Washington credentials—stints as White House chief of staff, OMB director, a deputy secretary of State and a variety of positions on the Hill—and the fact that he’s been through the confirmation process before point to smooth sailing on his path to Treasury in the next few weeks.
Caren Bohan and Nancy Cook contributed
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