Obama likely to tap Lew for Treasury

Jacob Lew in September.
Chip Somodevilla/Getty Images)
Jacob Lew in September.

WASHINGTON — President Obama is expected to announce Thursday that he intends to elevate his chief of staff and former budget director, Jacob J. Lew, to be his next secretary of Treasury, according to people familiar with the decision.

If confirmed by the Senate, Lew, 57, would be Obama’s second Treasury secretary, replacing Timothy F. Geithner, the last remaining principal on Obama’s economic team, at the head of that team.

While Lew has much less experience than Geithner in international economics and financial markets, he would come to the job with far more expertise in fiscal policy and in dealing with Congress than Geithner did when he became secretary at the start of Obama’s term. That shift in skills reflects the changed demands , as emphasis has shifted from the global recession and financial crisis of Obama’s first years to the continuing budget fights with Republicans in Congress to stabilize the growth of federal debt.


The partisan tension over the budget between Obama and Republicans suggests that Lew will face a grilling by Senate Republicans in confirmation hearings. Despite weeks of speculation that Lew would be named Treasury secretary, Republicans have not signaled that they will stage the kind of opposition they put up to Obama’s potential nomination of UN Ambassador Susan Rice for secretary of state, and Chuck Hagel as secretary of defense; Obama named Hagel on Monday and has nominated Senator John F. Kerry, Democrat of Massachusetts, for secretary of state.

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Lew’s departure would create an important vacancy for what would be Obama’s fifth White House chief of staff. The leading candidate is said to be Denis McDonough, the deputy national security adviser in the White House.

Lew had a brief turn in the financial industry before joining the Obama administration four years ago. He worked at the financial giant Citicorp, first as managing director of ­Citi Global Wealth Management and then as chief operating officer of Citigroup Alternative Investments.

His first job with Obama was in the State Department, where he was the deputy secretary responsible for managing day-to-day operations of the department and its international economic policy. Secretary of State Hillary Rodham Clinton protested to Obama in 2010 when the president tapped Lew to replace Peter R. Orszag as his budget director.

It was Lew’s second stint heading the Office of Management and Budget. He had served during President Clinton’s second term, helping to negotiate a bipartisan budget deal with congressional Republicans that led to four years of budget surpluses. In the 1980s, Lew was a senior aide to House Speaker Thomas P. O’Neill, a Democrat, also advising in budget negotiations with President Reagan.


He has been deeply involved in the deficit negotiations of the past two years. And, if he were confirmed in time, as Treasury secretary his first test could come as soon as next month, when analysts expect a fight over raising the debt ceiling, which is the legal limit on the amount that the government can borrow.

Republican leaders have said they would refuse to raise the ceiling unless Obama agrees to equal spending cuts, particularly in programs like Medicare and Social Security. Obama has said that he will not negotiate over the ceiling, with the country’s full faith and credit at stake.

With battle lines already drawn, the country is expected to run out of room under the ceiling sometime between mid-February and March. At that point, Congress would either need to raise the borrowing limit, or the country would start defaulting on obligated payments, like those promised to seniors, doctors, contractors, and bondholders.