Lew to focus on budget battles as treasury secretary pick

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WASHINGTON -- President Barack Obama on Thursday formally nominated White House Chief of Staff Jacob Lew to lead the Treasury Department, saying the longtime Washington operator and unassuming budget wonk would focus on the battles over the federal budget that are likely to consume the much of the president's second term.

In brief remarks in the East Room, Mr. Obama highlighted Mr. Lew's past experience negotiating budget deals, first as an aide to then-House Speaker Thomas "Tip" O'Neill and then as budget director for President Bill Clinton.

Noting the balanced budgets in the Clinton era, Mr. Obama said, "For all the talk out there about deficit reduction, making sure our books are balanced, this is the guy who did it -- three times."

Mr. Lew served as Mr. Obama's budget director before coming over to the White House early last year to calm one in a series of transition periods in the West Wing. Mr. Lew, a longtime Washington aide known for his low profile, has been Mr. Obama's fourth chief of staff.

"One reason Jack has been so effective in this town is because he is a low-key guy who prefers to surround himself with policy experts rather than television cameras," Mr. Obama said. "And over the years, he's built a reputation as a master of policy who can work with members of both parties and forge principled compromises."

The president made only a passing reference to another relevant item on Mr. Lew's resume -- his three-year tenure as an executive at Citigroup Inc. The relatively thin experience with Wall Street and markets has left some guessing as to how he might handle Treasury's increased regulatory role or negotiations over continued economic uncertainty in Europe.

But Mr. Obama's remarks made clear that Mr. Lew's top challenge is one closer to home. A year-end budget deal with congressional Republicans set up a series of upcoming fights over taxing and spending, debts and deficits, and Treasury will be closely engaged in the negotiations. Mr. Obama said he was confident that Mr. Lew shared his priorities -- and a commitment to protecting the social programs that the president has resisted overhauling.

Describing Mr. Lew, who is an Orthodox Jew, Mr. Obama said, "Most importantly, as the son of a Polish immigrant, a man of deep and devout faith, Jack knows that every number on a page, every dollar we budget, every decision we make has to be an expression of who we wish to be as a nation, our values."

As the face of Mr. Obama's fiscal priorities, Mr. Lew has critics. As Mr. Obama announced his choice, a handful of Republicans on Capitol Hill argued that the president was signaling that a big compromise on entitlement spending and deficit reduction would remain elusive.

"As the country struggles with a painfully slow economic recovery, Washington needs leaders who are willing to support reforms that will put us on a sustainable fiscal path," said Sen. Mike Lee, R-Utah. "It virtually guarantees the president will not compromise on entitlement reform, and assures that the White House will fight to maintain the status quo of our deeply dysfunctional system."

Alabama Sen. Jeff Sessions, the Senate Budget Committee's ranking Republican, said he would oppose Mr. Lew's nomination. "We need a secretary of Treasury that the American people, the Congress and the world will know is up to the task of getting America on the path to prosperity, not the path to decline. Jack Lew is not that man," he said.

Still, Mr. Lew is considered a far less controversial pick than Mr. Obama's other recent nominees for top posts: Republican former Nebraska Sen. Chuck Hagel for defense secretary or chief counterterrorism adviser John Brennan as CIA chief.

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