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Obama’s budget director at heart of fiscal cliff talks

Lou Rocco/ABC via The New York Times

Jacob Lew with George Stephanopoulos. Lew, 57, may be the most unassuming power broker in Washington.

WASHINGTON — When President Obama was locked in painful spending negotiations with House Republicans last spring, his exceedingly meticulous budget director, Jacob J. Lew, came to the Oval Office to propose some complex budget changes. As Lew delved deeper and deeper into the numbers, Obama put up his hand, signaling him to stop.

‘‘Jack, it’s fine,’’ the president said, according to Gene Sperling, Obama’s economics adviser, who witnessed the exchange. ‘‘I trust your values. I trust your judgment on this.’’

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Today Lew is the White House chief of staff (and on the shortlist to become the next Treasury secretary) and Obama has entrusted him with an even bigger task: guiding the White House through potentially treacherous negotiations with congressional Republicans to avert automatic tax increases and spending cuts on Jan. 1, which economists warn could throw the country back into recession.

An agreement by year’s end could lead to a long-term deficit reduction plan, helping Obama live up to his promise to bring both parties together and sealing Lew’s reputation as the master of the Washington budget deal.

But if the talks fail, Obama might be remembered as the president who could not break partisan gridlock in Washington, and Lew could wind up with a blot on his nearly impeccable record.

‘‘This is a reset moment for the administration and for Jack,’’ said Tom Daschle, the former Senate Democratic leader. ‘‘It’s a window that will close in a few weeks, but it really is an opportunity to start over. Part of the message of the election was, ‘You guys have got to work together.’ ’’

But Lew’s last go-round with Republicans, the debt ceiling talks in summer 2011, ended uncharacteristically badly. Lew irked House Speaker John Boehner and his staff, who viewed him as an uncompromising know-it-all. Lew’s defenders call it an aberration.

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‘‘I think it’s because Jack knows the numbers and they couldn’t pull a fast one,’’ said David Plouffe, Obama’s chief political adviser.

At 57, Lew may be the most unassuming power broker in Washington. He is deeply religious (an Orthodox Jew, he leaves work each Friday before sundown, when the Sabbath starts) and so strait-laced his colleagues feel compelled to apologize when they curse in front of him. He brings his own lunch (a cheese sandwich and an apple) and eats at his desk.

With his owlish glasses and low-key manner, Lew may come off as just a policy nerd. But he is a fierce negotiator. When defending social safety net programs, particularly those like Medicaid that help the poor, he morphs into a warrior, Republicans say, though he has proved willing to make concessions.

Lew arrived in Washington in 1973, a skinny, bookish 18-year-old from Queens, N.Y., who got his first taste of Democratic politics at 12, handing out fliers for Eugene McCarthy’s presidential campaign. Today, as a two-time former budget director (he also held the job under President Bill Clinton) he has an intricate understanding of budget policy.

In 1983, as an aide to House Speaker Tip O’Neill when Ronald Reagan was president, Lew helped put Social Security on a path to solvency with a plan that, to many Democrats’ chagrin, will eventually raise the retirement age to 67. He keeps a gavel from the day the legislation passed, signed by O’Neill, on a bookshelf in his office.

In 1997, under Clinton, Lew worked with Republicans to balance the federal budget, enabling the president to leave office with a surplus. Lew also has foreign policy experience; he spent the first two years of the Obama administration as deputy to Secretary of State Hillary Rodham Clinton.

He has little use for Washington’s social scene; a check of newspaper archives going back to 1977 show that Lew has never turned up in The Washington Post gossip column. His wife, Ruth, lives in their home in the affluent Riverdale section of the Bronx, N.Y.; they commute and have a daughter in Washington and a son in New York. He likes to cook.

By the time he was 23, Lew was a top policy aide to O’Neill, an experience that friends say sharpened his sense of how federal spending affects people’s lives.

The challenge now for Lew is to forge an agreement with Republicans that does not cut too deeply into the entitlement programs Democrats cherish.

Like Obama, Lew is a pragmatist; one person familiar with his thinking said he has in the past expressed willingness to raise the Medicare eligibility age to 67 from 65, a move many liberals oppose.

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