In what could be the most rational thing Obama has done since coming to office in 2008, it seems that he will be nominating Jacob "Jack" Lew — his chief of staff — for secretary of the treasury. That said, it will be interesting to see who will be running the show as Lew and Obama have very little in common fiscally.
Born in New York City, Lew is a Harvard graduate and a graduate from Georgetown Law School. Once a senior adviser to House Speaker Tip O’Neill, who will forever go down in history as Ronald Reagan’s top adversary, Lew developed a reputation for being very self-disciplined, while remaining a faithful Orthodox Jew.
Fiscally, there is little reason for Republicans to oppose Lew’s nomination, which was surely taken into account by Obama when considering his nomination. However, Lew’s ability to fiscally camouflage into a Republican will make for an interesting relationship between him and Obama.
Having been involved in nearly every major budget legislation in the past 20 years, Lew is no stranger to the obligations and issues that come with being the Treasury Secretary. One of Lew’s penchants is his visible proliferation of a balanced budget, being one of the chief negotiators that resulted in Clinton’s Balanced Budget Act of 1997. The most relevant position was being Chief of Staff and one of the most active negotiators with Boehner over the fiscal cliff negotiations.
The most interesting point of Lew’s political career however comes down to an article he published on the Huffington Post in February of 2011, discussing what the 2012 budget should include. In this article, his true fiscal colors shine.
The very first point he makes is that in order to start balancing the budget, “We need to stop adding to it.” This is followed by proposing across-the-board tax cuts, including a drastic reduction in corporate taxes back to the Reagan days. (Does this mean he regrets his Tip O’Neill Days?) Tax reform and simplification, along with his repetitive use of phrases such as tough choices and living within our means, should give Lew the green light from fiscal conservatives. The 2012 budget he discusses was meant to reduce the deficit by $1 trillion 66% of it would have been spending cuts.
Conservatives may point to his suggestion of cuts in defense spending as “un-Republican.” However, the spending growth in defense has in fact outpaced inflation, and with his cuts, would bring it back to par with inflation and merely bring it to zero real growth. Let’s not forget that there is also an ever growing movement in the right that wants massive spending cuts in the Pentagon. (Ron Paul anyone?)
The only visible issue in his policy outline that clearly contrasts with fiscal conservatives is his suggestion to eliminate 12 tax breaks to oil, gas and coal companies. However, we all know that those three industries, especially oil, will barely flinch at slightly higher taxation rates.
All in all, Lew is pretty fiscally sound, more so even than some Republicans. As a person, he brings an interesting combination to the table; a very self-disciplined, family oriented individual. Such a well-disciplined person seems to fit the image of a nation that needs to fiscally tighten its belt. It will be interesting however to see how Lew and Obama will combine for a fiscal policy as Obama’s personal flavor of taxing and spending certainly does not fit into the former’s economic mindset.