Liberals air doubts over OMB pick
By Alexander Bolton
The Hill - 07/23/10

Liberal Democrats are skeptical about President Obama’s decision to appoint a senior official from the Clinton administration to lead the Office of Management and Budget (OMB).


They suspect Jacob “Jack” Lew may share an affection for market-driven reforms they say were too popular among Clinton’s staff and that he would support cuts to Social Security and Medicare.

“I’m concerned he doesn’t have an affinity for some of the entitlement programs that we think are critical,” said Rep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus.

Grijalva called Lew a market-driven reformer and said there was a market-driven philosophy during the Clinton administration.

Lew served as director and deputy director of OMB under Clinton. His nomination to fill the OBM director role for Obama is expected to win Senate approval.

Rep. Lynn Woolsey (D-Calif.), the other co-chairman of the Progressive Caucus, said she would liked to have seen Obama pick a director who was expressly committed to preserving government programs designed to help the poor and middle class.

“I was not crazy about him,” Woolsey said of Lew. “I would like someone who would reach beyond the markets to humans.”

The concerns come in anticipation of recommendations from the National Commission on Fiscal Responsibility and Reform, a special panel Obama created by executive order to reduce federal deficits. The recommendations are due Dec. 1.

Obama gave the panel a broad mandate to cut entitlement spending and raise taxes when he formed it, declaring “everything has to be on the table.”

Liberals are worried the commission will propose cuts to Social Security and Medicare, which could suggest partial privatization of both programs to reduce costs.

Lew could have significant influence over the recommendations of the fiscal commission and how they are implemented. As OMB director, Lew would be in charge of the president’s budget and many spending decisions.

 Liberal lawmakers aren’t criticizing Lew’s record so much as expressing wariness about his long tenure in the Clinton administration.

He served as special assistant to Clinton in 1993 and 1994, helped design the AmeriCorps program and worked on the failed effort to pass healthcare reform.

 He went on to hold various positions at OMB, including the jobs of deputy director and director, under Clinton.

Lew also was a member of the Clinton negotiating team that reached a bipartisan agreement to balance the budget.

The Clinton administration’s view of entitlement programs has come under new scrutiny by liberals in recent days.

Liberal bloggers have picked up on reporting in a book published two years ago that discussed the negotiations between the Clinton administration and former House Republican Speaker Newt Gingrich (Ga.) to cut Social Security costs.

Negotiators explored a proposal to allow Social Security to invest funds in the stock market, a proposal reminiscent of a plan championed by President George W. Bush. Author Steven Gillon chronicled the talks in his book The Pact.

Adding more fuel to liberals’ concerns, Gillon reported that former White House Chief of Staff Erskine Bowles served as the liaison between Clinton and Gingrich.

The revelation has become newly relevant because Obama appointed Bowles to serve as co-chairman of the federal debt commission.

Members of the Congressional Progressive Caucus met with Bowles and the Republican co-chairman, Alan Simpson, on Wednesday to air their concerns.

Liberal leaders such as Grijalva fear the commission will attempt to reduce the deficit by proposing deep cuts to entitlements and social welfare programs that would affect the poor disproportionately.

 
Lew’s background with the Clinton administration has given them little comfort that he will serve as a strong line of defense for Medicare and Social Security.

 “We’re concerned they’re only looking at solutions for entitlements,” Grijalva said.

 Liberals told Bowles and Simpson they need to take into account the distributive effect of entitlement cuts and how they might affect minorities, the poor and the middle class.

Roger Hickey, co-director of the Campaign for America’s Future, a liberal advocacy group, said Lew’s nomination gives lawmakers a chance to press the Obama administration on entitlement reform.

Hickey said Senate confirmation hearings would provide a “good opportunity for Lew to say there’s no need to cut Social Security to reduce the deficit.”

Hickey said Lew should also speak out against healthcare vouchers and cuts in Medicare benefits.

“There’s a concern on the Hill that the fiscal commission is going in the wrong direction,” Hickey said.

Rep. Henry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, which has jurisdiction over healthcare, said the criticisms of Lew were “unfair.”

“I have a great deal of confidence in Jack Lew,” he said.

 Gary Bass, executive director of OMB Watch, said Lew “is not a market-forces guy” and could not recall Lew supporting entitlement cuts or privatization of Social Security during his tenure at OMB.

But Bass said liberals are smart to be wary.

“The pressure will be on Jack Lew to make spending cuts,” he said. “There’s every reason for the progressive community to resist.”

Bass cited two policies promoted during the Clinton administration that could prompt concern among liberal lawmakers.

 One was the Reinventing Government initiative headed by Vice President Al Gore. The program was first envisioned as an effort to improve government efficiency but eventually became focused on ways to cut government, Bass said.

Clinton was also a fan of micro-enterprise financing programs that built partnerships with business to improve social welfare in disadvantaged communities. Bass cited it as an example of market-driven reform favored under the Clinton administration.

Mike Lux, the CEO of Progressive Strategies, a political consulting firm, who worked with Lew on Clinton’s healthcare team, said liberals could trust Lew.

“He’s a very solid and very thoughtful guy who cared about working with progressives,” said Lux.

“I worked with him directly on healthcare issues and budget issues,” said Lux. “He always tried to do it in ways that were better for the poor and middle-class people.”

Lux also argued that many liberals support micro-enterprise financing as a way to help the poor.