Jacob Lew returns to work on fixing nation's finances, again

These leaders have been a driving force behind the nation's economic policies since the financial crisis of 2008.
Washington Post Staff Writer
Friday, February 25, 2011; 7:59 PM

At 27, Jacob J. Lew helped save Social Security. At 41, he helped cut a deal to balance the federal budget. During the Clinton administration, he became the only White House budget director in a generation to banish deficit spending.

In a city suddenly crawling with would-be deficit-busters, even some Republicans recognize Lew as the real deal.

"You guys did an absolutely magnificent job of managing the nation's fiscal affairs," Rep. Tom McClintock (R-Calif.) gushed when Lew, in his second stint as White House budget director, appeared last week before the House Budget Committee. "It's true it was a Republican Congress, but give credit where credit is due. You guys did a great job."

Now President Obama has asked Lew to work that magic again. During a news conference defending his own deficit-ridden spending blueprint, Obama called for bipartisan talks to fix the nation's finances, pointing to the Social Security deal of 1983, the balanced budget deal of 1997 and last year's tax deal as models for bipartisan action. Lew is the only senior member of the White House team who was involved in all three.

So it's worth listening when Lew talks about what's needed to unite the parties behind an ambitious deficit-reduction plan. And, frankly, the news is not good.

What past deals had in common, Lew said in an interview, was broad consensus about the scope of the problem and strong leaders committed to solving it. Today? Party leaders can't agree on a stopgap spending bill for the next seven months, much less a grand vision for the future of the tax code and Social Security.

The government will shut down Friday unless a compromise emerges. And after last week's free-for-all in the House, where conservatives forced reluctant Republican leaders to double proposed spending cuts, Obama administration officials say it's not clear that Speaker John A. Boehner (R-Ohio) could unite his caucus behind anything.

"They have a lot to learn about themselves," Lew said of the House GOP leadership, which is confronting an unusually large and independent-minded freshman class. "We can't yet know where they're really going."

With showdowns looming over spending and the $14 trillion national debt, Lew is a key player on a retooled White House team stocked with veteran dealmakers whose primary mission is to work with Republicans to make progress on the fiscal and economic issues driving the political debate in Congress and nationwide. Lew declared himself an "optimist" about his prospects.

But, he said, "We're heading into a more difficult and much more complicated conversation" than the talks that produced deals of the past - "because the size of the problem is so great, and the distance between the parties is pretty great as well."

The new White House team is dominated by old hands from the Clinton administration who have been through all this before. Clinton weathered a bitter battle over spending and two government shutdowns before cutting a balanced-budget deal with a Republican Congress in 1997, the year after he won reelection.

Lew and Gene B. Sperling are both back at their old jobs, Lew as director of the Office of Management and Budget and Sperling as the president's chief economic adviser. Clinton's top domestic policy aide, Bruce Reed, just signed on as Vice President Biden's chief of staff, fresh off a stint as executive director of Obama's fiscal commission. Rob Nabors, a Lew protege from the Clinton budget office, heads Obama's legislative shop. The list goes on, right up to Obama's new chief of staff, the former Clinton Commerce secretary William M. Daley.

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