For 30 years, Jack Lew has had a hand in some of the biggest economic deals negotiated in Washington. What awaits him if he’s confirmed as treasury secretary could far exceed any challenge of the past — a triple-decked potential crisis that will test his experience the moment he opens his office door on the third floor of the Treasury Building
Lew, nominated for the job Thursday by President Barack Obama, has honed his skills in the trenches of fiscal policy, helping forge major deals encompassing Social Security and budgets for the likes of former Speaker Tip O’Neill and President Bill Clinton.
Obama highlighted that experience in announcing Lew’s selection, an unmistakable nod to the fast-approaching deadlines to raise the government borrowing limit, avert deep and immediate spending cuts and extend government operations.
“I trust his judgment,” Obama said. “I value his friendship. I know very few people with greater integrity.”
Flanked by Lew and outgoing Treasury Secretary Timothy Geithner in the White House’s ornate East Room, Obama in effect underscored the nation’s changing economic landscape. In Geithner, Obama had a longtime banking and monetary policy specialist with the Treasury and the Federal Reserve who took office in 2009 at the height of the nation’s financial crisis. In Lew, he has a premier budget expert as the government plunges into its next struggle over debts and deficits.
Of the three looming events that would confront him if confirmed, none has the potential for more economic damage than the debt ceiling. Failure to increase it from its current $16.4 trillion would force the government to default on its debts, an unprecedented event. Republicans have demanded spending cuts in exchange for raising the debt ceiling. Obama has vowed not to negotiate over the nation’s ability to pay its obligations.
It’s the kind of standoff that requires not only budget knowledge, but also negotiating skill. Obama praised Lew for exemplifying both.
“Over the years, he’s built a reputation as a master of policy who can work with members of both parties and forge principled compromises,” Obama said.
But House Republican officials who negotiated with Obama’s team over a debt ceiling deal in the summer of 2011 described Lew as unyielding, saying he displayed a greater desire to persuade than to negotiate and to use what they considered budget gimmicks to show cuts in spending.