By choosing Jacob (Jack) Lew as the next Treasury Secretary, President Obama has turned to a trusted aide and one of Washington’s most seasoned budget negotiators – a strong ally of liberal Democrats whose style has aggravated congressional Republicans.
The president is expected to nominate Lew, the current White House chief of staff, to succeed Treasury Secretary Timothy F. Geithner on Thursday, and to urge the Senate to give swift approval to his choice. Unlike Geithner, a former president of the New York Federal Reserve Bank with a reputation for deftly juggling the 2008 financial crisis, Lew is the consummate D.C. insider with years of experience shaping federal budgets.
Lew initially led the Obama administration’s 2011 debt-ceiling talks with top Republican lawmakers. Although he long enjoyed a reputation as a straight shooting numbers guy, his approach infuriated House Speaker John Boehner and GOP congressional aides.
Lew, 57, was portrayed as the Republicans chief tormentor during the contentious 2011 negotiations in Bob Woodward’s book, “The Price of Politics.” At the time, Lew was in the second of what could be four assignments in the administration as director of the Office of Management and Budget.
When Boehner reopened stalled talks with Obama on July 15, he had a request, Woodward writes: "Please don't send Jack Lew. The budget director talked too much, was uncompromising, and Boehner's staff did not believe he could get to yes."
Republicans saw him as an annoyance who preferred to lecture them on why the Democratic worldview was superior, Woodward reports. At one point as a favor for Boehner, Ohio Gov. John Kasich—a former Republican chairman of the House Budget Committee—stepped-in and asked if talks could instead occur with Gene Sperling, the chairman of the White House National Economic Council. Administration officials refused.
Boehner told Woodward, "Jack Lew said no 999,000 times out of a million." Then he corrected himself. … At one point I told the president, keep him out of here. I don't need somebody who just knows how to say no."
Boehner's chief of staff at the time, Barry Jackson, described Lew this way: "Always trying to protect the sacred cows of the left." Woodward writes that Jackson said Lew would be "going through Medicare and Medicaid almost line by line while Boehner was just trying to reach some topline agreement."
To Lew, the problem was that Boehner did not like details, according to Woodward.
"When the Speaker's office made a proposal, Lew would return with an analysis of what it would mean for the average Medicare retiree and people at different income levels," Woodward writes. "It complicated the negotiations, and in Lew's experience, the answer 'things are complicated' was not highly appreciated by the speaker's office."
Lew was also stunned by how congressional Republicans disrespected Obama. At a crucial moment in the 2011 negotiations, Boehner refused to return a White House phone call, something that Lew knew never would have happened when his former boss House Speaker Tip O’Neill was hashing out an agreement with President Reagan.
Whether those hard feelings persist remains to be seen. But by picking Lew as the next Treasury Secretary, Obama has indicated his economic focus going forward. Lew has cultivated a reputation for dissecting the nooks and crannies of government finances, whereas Geithner had to rebuild the entire infrastructure for regulating banks and the markets.