JANUARY 9, 2013
Two years ago I was interviewing Tim Geithner when he started ticking off the ways he was poorly suited to being Treasury secretary late in Obama’s first term. Above all, he said, was the fact that the job was increasingly focused on questions of values and ideology—how the government should spend its scarce resources, who should get the shaft and who should pick up the tab—whereas Geithner saw himself as a financial technocrat. “A huge part of the economic challenge the president faces on this stuff is that it’s going to be at the center of the political debate,” he told me. “You could argue—and I’ve made this argument in the past—you want somebody in this job who can bridge the political world in a different way than I can.”
By nominating Jack Lew to succeed Geithner, it may look like the president has substituted one technocrat for another. Lew is a two-time White House budget director and 30-year Washington veteran whose formative professional experience was helping Tip O’Neill bring Social Security into actuarial balance in a deal with Ronald Reagan. (He was all of 27 at the time.)
In fact, Lew has a well-deserved reputation for homing in on the values that lurk behind the numbers. Progressives in and out of government in the late 1990s recall him as one of the key defenders of Medicare and Medicaid from the designs of axe-wielding Republicans. “There was no bigger supporter,” one liberal policy maven told me. “He saved Medicaid.” More recently, as a top Obama emissary to the deficit negotiations of the last few years, he’s been dogged in his insistence that Democrats won’t entertain the tiniest pinprick to these programs unless Republicans put revenue on the table.
That, I’d guess, is half the reason Republicans have reservations about him (at least to the extent their reservations are sincere rather than a crass play for leverage). The other half is that Lew is just plain effective. During Obama’s first confrontation with the House GOP in early 2011, John Boehner’s troops were bent on lopping $100 billion off Obama’s budget request for that year, an eye-popping sum to squeeze out of a weak economy. Obama, with Lew as his chief negotiator, eventually compromised at $78 billion, which looked at first like a massive concession, but was a pretty favorable outcome once you read the fine print. As it happened, Lew was able to produce a “headline” number that was large and pleasing to the GOP but ultimately rather meaningless: He’d conjured up cuts to piles of money that weren’t going to be spent anyway, and handed them over to Republicans wrapped in pretty little bows. “Boehner and his guys got snookered by [Obama congressional affairs liaison] Rob Nabors and Jack Lew,” a senior White House official told me while I was writing a book on the subject. “We protected what we wanted to protect.”
Perhaps not surprisingly, GOP leaders have repeatedly petitioned the White House to send someone other than Lew to join them at the bargaining table. Which points to at least one reason to love his nomination: It’s an instance of Obama emphatically not allowing Republicans to choose their negotiating partner, a rule he hasn’t always observed.
Whatever the indigestion on the right, though, there’s no remotely coherent reason for the Senate to block Lew, and I suspect he’ll be confirmed by a wide margin. The longer-term threat to his tour as Treasury secretary could be grumbling on the left. This may be counterintuitive given his progressive credentials. But there’s a special sense of contempt people reserve for fellow travelers they feel may betray them, and it turns out Lew simply isn’t someone who believes Medicare and Social Security are untouchable. To the contrary, he was very much a proponent of pruning Medicare during the 2011 back-and-forth, at least if the GOP reciprocated with equally painful concessions. Among other things, Lew argued internally for ideas like raising the program’s eligibility age, something that makes the hair stand up on the backs of liberals’ necks, and which prompted much hand-wringing among some of Obama’s advisers. (I have details on the debate in my book.) Some liberal budget activists even whispered conspiratorially that Lew’s two years at Citigroup had changed him, though this seems a stretch given that Lew spent his days there keeping an eye on the books, not consorting with masters of the universe. (Which is not to say a liberal wonk didn’t have better things to do in 2007 than toil for a bank trying its damnedest to blow up the world.)
For the record, I’m someone who thinks the Medicare changes Lew has supported are lousy ideas. More broadly, I worry that Lew may be too romantic about the virtues of a deficit grand-bargain to walk away from a bad deal. But I think liberal criticism of this sort is a bit misplaced. Because to the extent these flaws may characterize Lew’s tenure at Treasury, they’ll say less about him than the man who’s hiring him. “[Lew] has serious commitments to traditional causes … but at the same time believes you need to have a solvent government,” a former administration colleague told me. “It always struck me as the Obama approach.”
Simply put, the president is getting the Treasury secretary who most closely reflects his thinking about the size, shape, and role of the state (something that, by the way, seems increasingly true of his second-term cabinet writ large). However that works out, it’s all on Barack Obama in a pretty deep and inescapable way. Which, in the end, is as it should be.