Jack Lew expected to lead Treasury (+video)
Jack Lew, President Obama's likely pick for Treasury secretary, will face tricky economic topics in his new role. If confirmed, Lew will be an important player in the president's plans for deficit reduction.
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His nomination will leave open the position of chief of staff. Obama's deputy national security adviser, Denis McDonough, is considered the top candidate to take on that role.Skip to next paragraph
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Looming budget deadlines
Lew's portfolio will be at the heart of Obama's second term agenda. Fresh from difficult talks to prevent a U.S. "fiscal cliff," the president has made deficit reduction a top priority for the next four years.
Republicans, many of whom were unhappy with the pact agreed to on New Year's Day that raised tax rates for the wealthiest Americans, are unlikely to block his nomination, one analyst said.
"I don't think Republicans are terribly excited about the pick, but I don't think that they'll do anything to derail the nomination," said Michelle Girard, a senior U.S. economist at RBS. "I think that he'll be confirmed and they'll go on to the battles that need to be fought."
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."
More heated battles and fiscal deadlines loom.
By the end of February, Congress must raise the $16.4 trillion debt ceiling on how much the Treasury can borrow or risk a damaging debt default.
On March 1, deep automatic spending cuts to defense and to a wide swath of domestic programs start to go into effect unless Congress acts.
And at the end of March, a stop-gap funding measure expires and the government could be forced to shut down if Congress does not approve another bill to fund federal operations.
Geithner, who survived calls for his resignation and bore the brunt of the criticism for how the Obama administration handled the financial crisis, managed to win over Republican lawmakers in his four years as Treasury secretary.
Late last year, Obama picked Geithner over Lew to lead talks with Congress to avert the New Year's day "fiscal cliff" of tax increases and spending cuts. Lew had angered key Republicans during the budget negotiations in 2011.
White House spokesman Jay Carney declined to confirm news of Lew's appointment, but praised him during a briefing with reporters. Lew would be the fourth man nominated for a top administration position after Kerry, Hagel, and John Brennan, Obama's pick to lead the CIA. Some Democrats and women's groups have criticized Obama's record of making only male hires so far for his second term.
Aside from the cabinet's gender mix, Lew's international credentials could raise concerns, as a U.S. representative in key economic groupings of finance ministers.
"The first thing Jack Lew is going to have to face is that there is an international side. It's not going to be foremost for the next few months, nor should it be. But he's not going to be able to ignore it for much longer," Adam Posen, the president of the Peterson Institute for International Economics and a former policymaker with the Bank of England, told reporters.