Q&A with OMB Director Jacob Lew
Budget director Jacob Lew commented on the role of Social Security in solving major budget problems, reports of bipartisan Senate deficit talks, and whether there are contingency plans for a shutdown of the US government at a Feb. 17 Monitor lunch.
Washington — Budget director Jacob Lew heads the White House Office of Management and Budget. He previously held that post during the Clinton administration, when the nation enjoyed three consecutive annual budget surpluses. Earlier, he was a policy adviser to House Speaker Thomas P. "Tip" O'Neill. Mr. Lew was a guest speaker at the Feb. 17 Monitor lunch in Washington, D.C.
Reports that a bipartisan group of senators is working on a plan that would trigger tax hikes and spending cuts if Congress fails to live within spending targets:
"The fact that there are bipartisan conversations going on in the Senate in and of itself is a positive thing.... We need to watch where their conversations go.... We haven't seen a [plan] from the Republican leadership.... We need to see what the competing visions are ... then we need to figure out how to work ... on a bipartisan basis to get something done."
The role of Social Security in solving major budget problems:
"It is often misunderstood. Social Security does not contribute to the deficit in the medium term.... There is no need to deal with Social Security, and dealing with it would have at best a negligible impact."
Ensuring that Social Security can pay full benefits to retirees in 2037, when its trust fund surplus will be depleted:
"It is a system where we have a tradition and history of making sure it is solidly funded for 75 years. At the moment ... it is solidly funded until 2037. And we think it is important to make a commitment to current retirees and workers and future retirees that the system will be sound for the duration of the [75-year] period, and we want to work together on a bipartisan basis to do that.... It is essentially a parallel issue" to the budget deficit and debt problem.
"We are planning on reaching the kind of agreements that make it unnecessary to put the American people through a government shutdown. So I don't want to either intentionally or unintentionally send any signals that suggest that we're planning to the contrary."
Consequences if Congress doesn't raise the debt ceiling:
"The consequences of failing to raise the debt limit are really quite draconian.… We have never seen the United States fail to pay its financial obligations.... It is something that could create a financial crisis that does not need to exist."
Likelihood of completing major entitlement reform as a presidential election approaches:
"We have to use the next two years to try and get something done.... We have to get as much done as we can."