Sometimes, there’s a man, well, he’s the man for his time and place. He fits right in there. —The Big Lebowski
Several news outlets are reporting that Jacob L. Lew, President Obama’s current chief of staff, is set to become the next US Treasury Secretary. If true, and if confirmed, Lew would be taking arguably one of the most important jobs in American governance. The bulk of the Treasury’s employees work in the Internal Revenue Service, but the sprawling bureaucracy has its fingers in everything from bank regulation—in its office of the Comptroller of the Currency—to buying the bulk loads of zinc used to make the ever more irrelevant pennies manufactured by the US mint.
And Lew’s nomination would mark something of a departure from the recent trend in selecting Treasury secretaries, which have been either old-school CEOs (John Snow, Paul O’Neill) or creatures of Wall Street (Tim Geithner, ex-President of the New York Fed, and former Goldman Sachs CEO Hank Paulson.)
Lew’s expertise, however, is in debt. And with $16.4 trillion worth of US government debt outstanding, it may well be a budget guy that the US needs. He served as budget director under both Presidents Obama and Clinton. And he’ll be putting that expertise to use almost immediately in a high stakes public game of chicken with Congressional Republicans over the debt ceiling. Luckily, he’s played this game before. As the New York Times reported last month:
In 1983, as an aide to Speaker Tip O’Neill when Ronald Reagan was president, Mr. Lew helped put Social Security on a path to solvency with a plan that, to many Democrats’ chagrin, will eventually raise the retirement age to 67. He keeps a gavel from the day the legislation passed, signed by Mr. O’Neill, on a bookshelf in his office.
In 1997, under Mr. Clinton, Mr. Lew worked with Republicans to balance the federal budget, enabling the president to leave office with a surplus.
The Washington Post reported in 2011 on Lew’s duties during those budget showdowns:
During intense talks with the Reagan White House to avert a looming crisis in the Social Security trust fund, Lew said his job was to carry messages and “send accurate signals about what was acceptable” to each side. When the deal was finally struck, Lew made the call to Pebble Beach to brief O’Neill and Ways and Means Chairman Dan Rostenkowski and to coordinate the announcement with the White House – one of the few times Lew, who observes the Orthodox Jewish sabbath, recalls using the telephone on a Saturday.
Lew said he was proudest of the decision to tax Social Security benefits and plow the revenue back into the trust fund, a key piece of a complex deal that also included a gradual increase in the retirement age. The tax “could easily have been seen by Democrats as an unacceptable benefit cut,” Lew said. “But we spent months and months talking about it so it never got into that category of things where, if you accepted it, you would be betraying a principle.”