Orszag Is Economic Centrist Who Knows How to Deal

By Philip Rucker
Washington Post Staff Writer
Friday, February 27, 2009

The gangly, bespectacled official who yesterday laid down the fiscal footprint of a new presidency is an unassuming man who proudly refers to himself as the administration's "super-nerd."

"I hope I don't bore everyone else in the room," Office of Management and Budget Director Peter Orszag deadpanned to an auditorium full of reporters as he unveiled President Obama's first budget.

Orszag, at 40 the youngest member of the Cabinet, has assumed an outsize influence among the tight circle of wonks Obama has dubbed his "propeller heads": a team of economists with big personalities and bigger intellects. Orszag has already surprised lawmakers on Capitol Hill with his apparent overnight transformation from the low-key academic they remember from his tenure at the nonpartisan Congressional Budget Office to a political dealmaker instrumental in negotiations over passing Obama's economic recovery plan.

In the past week, Orszag has unveiled a $3.6 trillion budget and convened a "fiscal responsibility" summit aimed at easing the country's economic crisis and advancing the president's domestic agenda. He is also expected to play a leading role in efforts to reform the nation's health-care system.

A self-described economic centrist who fought President George W. Bush's proposal to privatize Social Security, Orszag thinks the soaring costs of health care pose the biggest threat to the nation's fiscal health. Left unchecked, he fears, health-care costs will become "the primary driver" of a crisis.

"We have a very serious short-term economic crisis, and we've got these budget deficits going out over time that are much larger than were projected even a year or two years ago," Orszag said in an interview this week in his conference room adorned with battle memorabilia from the Revolutionary War. "If we don't act, we will eventually have a fiscal crisis."

Orszag is among the least visible but most influential of Obama's aides. With Treasury Secretary Timothy F. Geithner and National Economic Council Director Lawrence H. Summers, he briefs Obama at 9:30 each morning in the Oval Office.

"He doesn't come in and say, 'I've got a problem,' " White House Chief of Staff Rahm Emanuel said. "He says, 'I've got a problem, and here's my idea for a solution.' . . . I can't imagine we'd be at this point in passing the economic recovery act and 10 days later having this budget if it wasn't for the fact that Peter Orszag was running both."

At the OMB, Orszag leads a 500-employee office that analyzes costs and makes decisions that guide most of the government's spending. His position is hardly that of "just an accountant," said Alan S. Blinder, a Princeton University economist who mentored Orszag and held top posts in the Clinton administration. "Nothing happens without the OMB that involves money. . . . When the Pentagon comes to talk about targets, they don't involve the OMB director. But when they come to talk about how many battleships they want, they do involve the OMB director."

Republicans in Congress may disagree with Obama's spending priorities, but many nonetheless hold Orszag, a centrist Democrat, in high regard. At Orszag's confirmation hearing last month, Sen. Judd Gregg (N.H.), the top Republican on the Budget Committee, said, "I'm not sure why we're having this hearing," noting that "everyone in this room" would support Orszag and his deputy, Robert Nabors.

With Orszag's new job comes a sort of fame. A divorced father of two, Orszag is suddenly one of Washington's most eligible bachelors. He posed in his cowboy boots for Annie Leibovitz's March Vanity Fair spread. During a photo shoot for the New York Times Magazine, he recalled, "They'd say, 'Chin up! Hips out!' I'd say, 'You've got to be kidding me. I'm sorry, I don't do that.' "

But he revels in some of the perks. When his son, Joshua, turned 7 last week, Orszag took him to breakfast at the White House mess. Of course, his daughter, Leila, expected the same when she turned 9 yesterday -- the day of the budget release. He asked her to reschedule breakfast for a different day, but she persisted. "I'm taking my daughter to the White House mess in the midst of all this other chaos," Orszag said with a sigh.

A marathon runner, Orszag wakes up at 4:30 a.m. for jogs in Rock Creek Park and occasionally runs home -- uphill -- from his downtown office to his house in Friendship Heights.

Economics are a family business for Orszag, the second of three sons of a Yale mathematics professor. As a boy, he would crunch numbers on his father's computers. He could calculate batting averages at Boston Red Sox games. He accompanied his father to academic meetings around the world: a physics institute in France, the national laboratory at Los Alamos and Cambridge University in England.

"He had a wide range of exposure," said his mother, Reba Orszag.

An avid reader of biographies, Orszag was an ambitious, competitive and unusually meticulous student, his mother said, finishing assignments days in advance and taking detailed notes on 4-by-6 cards.

In 1993, with a degree from Princeton and a doctorate from the London School of Economics, Orszag entered the Clinton White House as a junior staffer and quickly impressed veteran economists.

Former Federal Reserve Board chairman Alan Greenspan said he is "fascinated" by Orszag's depth of knowledge. "Peter Orszag is as good a technician as I know," Greenspan said.

After a succession of other posts, including directing the Hamilton Project at the Brookings Institution, Orszag moved to the Congressional Budget Office in 2007. There, he forged ties with lawmakers in both parties.

Those relationships were put to use last month when Obama dispatched him to Senate Majority Leader Harry M. Reid's office to secure deals on the stimulus with wavering moderates.

"He wasn't just some pointy-headed intellectual," said Jim Manley, a spokesman for Reid (D-Nev.). "He grasped the politics at stake, as well."

Orszag helped sway three Senate Republicans, whose votes would prove critical. Reid later took to the Senate floor and called him "a brilliant man."

But even brilliant men make mistakes. On Orszag's first Sunday in his new job, he decided to try out the fireplace in his office in the Eisenhower Executive Office Building. Natural logs were already in the fireplace, and thinking it was operational, Orszag lighted a fire. "It was actually quite nice," he said.

Unbeknownst to him, the chimney was capped. Smoke billowed from an upstairs office. The alarm sounded, and the building was evacuated. It was carried live on cable news.

"Suffice it to say," the budget director said, "we won't be using that fireplace again. It was me. I'm guilty."

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