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OMB nominee Lew warns of 'critical' fiscal period

By Ed O'Keefe

The coming months may be the most critical time for fiscal policy in recent years, President Obama's nominee to serve as budget chief told lawmakers on Thursday.

Jack Lew, tapped to lead the Office of Management and Budget, also urged lawmakers to look beyond scoring short-term political points as they explore ways to create jobs and pay down the federal deficit.

"It's a very, very significant challenge to simultaneously focus on the fact that we have to continue to encourage economic growth, we have to encourage job creation, but we can't put off for years worrying about the deficit," Lew told the Senate Budget Committee. "We have to be able to think about both at the same time. I think that the key challenge is for us to begin to take actions which won't have an effect today or tomorrow."

Lew, who also served as OMB director during Bill Clinton's administration, said the budget surpluses of the 1990s won't be possible again without strict fiscal discipline, adding that the Clinton administration reluctantly adhered to "pay as you go" rules.

"That meant saying no to a lot of things that we would have liked to have done," Lew said, adding that the current lack of fiscal discipline is affecting the private sector.

"I think that we're now in a place where the size of the deficit and the lack of serious conversation about how to reduce it causes a great deal of unease and uncertainty which I take as one of the reasons why businesses across the country are sitting on an awful lot of resources stashed," Lew said.

When asked, Lew once again voiced support for adopting a biennial federal budget process.

"In the many years it's been discussed, I've never seen a consensus form around it, but I think it's a conversation very much worth pursuing, because the effective implementation of programs is both a challenge at OMB and Congress that we all need to pay attention to," Lew said. He took a similar position as Clinton's budget chief. Senators of both parties agreed with Lew, citing the stalled budgetmaking process in recent years.

Lew, 55, currently serves as the State Department's deputy secretary for management and was once an aide to House Speaker Thomas "Tip" O'Neill (D-Mass.). Senators fondly recalled his years as a Congressional aide, signaling an easy confirmation. Budget Committee Chairman Kent Conrad (D-N.D.) said the panel plans to vote on Lew early next week.

But Lew is one of a handful of Executive Branch nominees that require the approval of two Senate committees. He cited information technology procurement, government contracting reform and performance management efforts as three of the most important management issues facing the Obama administration in an afternoon hearing with the Senate Homeland Security and Governmental Affairs Committee.

Lew demurred when asked whether the government should freeze the salaries of civilian federal workers, suggesting it may cost more money to recruit and hire outside contractors whose positions are being insourced by federal agencies.

Members of both parties on the government affairs panel panel pledged support, but Sen. Susan Collins (R-Maine) noted: "The last time Mr. Lew served as OMB director, a Democrat president worked with a Republican Congress to balance the federal budget. I hope this is a case where history repeats itself."

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By Ed O'Keefe  | September 16, 2010; 1:37 PM ET
Categories:  Budget, Confirmation Hearings  
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Next: Hillary Clinton on the tea party, Chelsea's wedding


can't we just tax the richchchch?

Posted by: jiji1 | September 17, 2010 4:30 PM | Report abuse

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