Senator Jeff Sessions, the top Republican on the Senate budget committee, expressed disapproval. "Jack Lew must never be secretary of treasury," he said, calling testimony that Lew made to the committee about the president's budget "outrageous and false."Tough talk. But given the Senate's record of having only blocked nine Cabinet nominees in its entire history, Sessions's objections appear to be little more than hot air. Other Republicans reportedly have said he's is a hard-nosed negotiator but works assiduously to come up with something everybody can live with. At least, everyone who is actually party to the negotiations.
On the other side, concerns about Lew's short tenure in 2008 as chief operating officer of Citigroup Alternative Investments in 2008. The firm made investments in hedge fund, betting on a collapse of the housing market. Shahien Nasiripour provided some background on the matter in 2011 when Obama chose Lew to head up the Office of Management and Budget, a post for which he was confirmed unanimously by the Senate. Lew made millions at Citi. Upon his departure in 2009 he collected a bonus approaching $950,000. Shortly before, the firm had received billions in taxpayer dollars as part of the bailout of the financial sector of the economy.
Lew also said in testimony in the hearings for the OMB job that he didn't believe deregulation was the "proximate cause" of the meltdown that produced the financial disaster of the Great Recession. That's a stance President Obama himself, commissioners at the Securities and Exchange Commissioner, senators and representatives, economists and financial experts all disagree with. As OMB director for President Bill Clinton 1998-2001, Lew was deeply involved in that deregulation.
None of that will derail his nomination, however, unless Senate Republicans plan to do what they have done with the filibuster and try to change the entire approach to how the Senate deals with Cabinet appointments. As Steven Kornacki of MSNBC noted Wednesday night on the Rachel Maddow Show, if they were to do that it would mean big trouble down the road for a president facing a Senate ruled by a majority of the other party.
With only a couple of forays into the private sector, Lew has been in public service for the Democrats since 1974 when he served as an aide for Rep. Joe Moakley of Massachusetts. He did his first work for Democrats in 1968 when, age 12, he campaigned for upstart antiwar candidate Eugene McCarthy. After graduating from law school in 1983, he became a senior policy adviser to House Speaker Tip O'Neill where he worked on economic issues including Social Security, Medicare, budget, taxes and trade. From that time forward, he is said to have exhibited an encyclopedic understanding of the federal budget, which is part of what made him a formidable adversary in the budget negotiations in 2011.
If Lew is confirmed, he will step into a job whose public profile will likely be even higher than it has been for outgoing Tim Geithner given the attention on the national debt, tax reform and the federal budget are expected to receive. First up will be what promises to be a bitter fight with Republican obstructionists over increasing the debt ceiling. President Obama has made dealing with deficit reduction a prime target of his second term. Much of that process will also fall under Lew's purview.