- The Washington Times - Tuesday, July 13, 2010

Facing a potentially crippling fight over deficits and debt, President Obama on Tuesday tapped as his new budget director Jacob J. “Jack” Lew, the same man who helped President Clinton negotiate with a Republican Congress to achieve balanced budgets in the late 1990s.

The announcement of the new director of the Office of Management and Budget was met with praise from Capitol Hill, where lawmakers already are engaged in battles over spending and are looking to the White House to referee.

“If there was a hall of fame for budget directors, then Jack Lew surely would have earned a place for his service,” Mr. Obama said in announcing the nomination.

He said a chief task for Mr. Lew would be to see through the president’s commitment to enforce a three-year freeze on non-security discretionary spending. Mr. Obama already has vowed to veto any spending bills that don’t meet that commitment.

Douglas J. Holtz-Eakin, former head of the Congressional Budget Office and now president of the conservative American Action Forum, said Mr. Lew is a consensus choice likely to breeze through the nomination process.

“You can’t find someone to say something bad about him,” said Mr. Holtz-Eakin, who pointed out that the sentiment was shared by both lawmakers and the staff who worked with him at OMB, which is a difficult double to achieve.

Mr. Holtz-Eakin said the choice is likely to help Mr. Obama as he tries to engage Congress in spending wars and increasingly has to turn to Republicans, particularly if they make big gains in November’s elections.

“The issues that they have to be engaged in, not by choice but by necessity, are issues that involving reducing spending, where they’re going to need Republican allies,” he said.

The Congressional Budget Office said the government has recorded a deficit of $1 trillion for the first nine months of this fiscal year, which is slightly lower than 2009’s record pace of $1.1 trillion through June. Fiscal 2009 ended with a deficit of $1.4 trillion.

Meanwhile, the nation’s debt topped $13 trillion last month.

Mr. Obama has argued that more spending is needed in the short term to boost the economy, but that Congress will have to take steps next year to begin lowering spending. But Republicans say they want to see cuts now.

On Tuesday, Republicans on the Senate Appropriations Committee said they will insist on a spending freeze on non-defense discretionary spending this year, which works out to $1.1 trillion.

That still marks a $10 billion increase over current overall spending because it includes a boost for defense, but the move is important because members of the spending committee usually support the final bills no matter which party is in charge.

“The American people are saying to us: You’re spending too much, you’re running up too many debts, and we expect you to do something about it,” said Senate Minority Leader Mitch McConnell, Kentucky Republican.

The OMB director is a Cabinet-level appointment, and serves as the traffic cop for much of the administrative duties of the White House, including issuing statements of policy on legislation and producing the president’s annual budget submission to Congress.

Mr. Lew would replace Peter R. Orszag, who is leaving as budget director at the end of this month. The White House said Mr. Lew’s paperwork would not be completed in time for him to take over before Congress leaves for its August recess.

Mr. Lew currently serves as a deputy secretary of state. To become OMB director will require Senate confirmation. The last time he won the job, in 1998, the Senate confirmed him by voice vote.

Republicans are likely to use Mr. Lew’s nomination as a chance to attack the Obama fiscal record. The deficit for 2009, which included nearly nine months under Mr. Obama and more than three under President Bush, set a record for the most red ink in history, and this year’s total is likely to come close.

In tapping Mr. Lew, Mr. Obama is hoping to recapture some of the magic of the late 1990s when Republicans in Congress worked with Mr. Clinton to strike a balanced budget deal in 1997, then followed through, producing three straight budgets in balance.

“When Jack walked out of the Office of Management and Budget in 2000, there was a $237 billion surplus. I think that’s the type of experience that the president was looking for,” White House press secretary Robert Gibbs said.

In 2000, Mr. Lew was a key voice late in the Clinton administration warning against assuming large surpluses for the sake of writing bigger tax cuts - a policy President George W. Bush pursued, and which has since become a heated debating point.

On Capitol Hill, Mr. Lew’s nomination set off another round of debate over which party has been less fiscally responsible.

Democrats, who control both chambers, have failed to pass a budget this year, though House Democrats pushed through spending caps designed to provide one-year guidance.

House Minority Leader John A. Boehner, Ohio Republican, said that was a sad substitute for the real thing.

“The American people know that in tough times a budget is more important - not less,” Mr. Boehner said. “Congress‘ failure to pass a budget means we’re missing an opportunity to cut spending now and provide the fiscal discipline that economists say is needed to create jobs and grow the economy.”

House Majority Leader Steny H. Hoyer, Maryland Democrat, acknowledged they could not pass a full budget this year, but defended the one-year targets as a valuable restraint on spending.

“For anybody to pretend that we haven’t taken action on a budget is incorrect,” he said, pointing out that the one-year targets have “the same consequence as a budget would have had.”