OMB nomination delay would mean no adviser for key budget period

The possible delay of Jacob Lew's confirmation to be White House budget director could leave the Obama administration without a key adviser heading into a crucial budget period.

Sen. Mary Landrieu (D-La.) on Thursday announced she would hold up Lew’s confirmation until the administration lifts or eases a federal freeze on deepwater oil-and-gas drilling. With the Senate expected to recess next week until after the midterm elections, Lew may have to wait until mid-November, at the earliest, to start work at the Office of Management and Budget (OMB).

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That could leave OMB without a permanent director during "an intense time" for the 2012 budget process, a senior OMB official said.

The budget office will begin to consider federal agencies’ funding requests in October and November, the official said. The administration this fall will also deal with two other major fiscal matters: the appropriations bills to fund the government for 2011 and the final deficit-cutting recommendations from the president’s fiscal commission, which are due on Dec. 1.

In addition to overseeing the drafting of the budget, the OMB director serves as an economic adviser to the president. Lew had that hybrid role during his first stint as OMB director in the Clinton administration in the late 1990s.

"Even if we held certain decisions until after he's confirmed, to get him up to speed and all the other things to get his hands around a new job, I think Jack or anyone coming into a position like this would always prefer to have more time or less time before this [period],” the senior OMB official said.

The OMB post is just one of several White House economic positions going through a transition. Obama’s most prominent economic aide, Lawrence Summers, is leaving the president’s National Economic Council at the end of the year. And Obama recently promoted Austan Goolsbee to replace Christina Romer as chairman of the president’s Council of Economic Advisers.

The White House budget office has been without a permanent director since Peter Orszag departed in July. The deputy OMB director, Jeff Zients, has served as the agency’s acting director. Former deputy OMB director Rob Nabors has returned from the White House to the agency to serve in an interim role.

The slowdown of Lew’s nomination comes despite broad bipartisan support for installing him at OMB. The Senate Budget Committee recommended that Lew be confirmed on a 22-1 vote. The lone vote in opposition came from Sen. Bernie Sanders (I-Vt.), who has doubted that Lew would push policies that are tough on Wall Street. The Senate Homeland Security and Governmental Affairs Committee approved Lew on a unanimous vote.

Lew earned a reputation for being able to work with Republicans in the late 1990s, when he helped Clinton craft budget deals with GOP congressional leaders. That was the last time that the federal budget ran surpluses.

Lew is being asked to return to OMB at a time when annual deficits are exceeding $1 trillion and the debt is growing at an unsustainable rate, a fact that Lew himself acknowledged during his Senate confirmation hearing.

Landrieu, in announcing that she would hold up Lew’s nomination Thursday, praised his expertise but said he “lacked sufficient concern for the host of economic challenges confronting the Gulf Coast.”

Landrieu sent a letter to Senate Majority Leader Harry Reid (D-Nev.) that said she couldn’t allow the nomination to proceed until she got “a commitment from Mr. Lew, the president or another senior economic adviser to reverse these policies, which have been so detrimental to working families across the Gulf Coast.”

Reid’s office declined to comment when asked whether Lew’s nomination would move to the floor before recess.

OMB watchers said the budget office could likely muddle through November without much difficulty, but they also noted that it would help the White House to have a budget chief in place.

Stan Collender, a former congressional budget aide, said that Zients, the acting director, is already an OMB veteran and can handle the budget period “quite well.” Collender noted that Obama has several resources he could turn to if he needs help on the 2012 budget, including OMB’s staff and Leon Panetta, the current CIA director and another former OMB director for Clinton.

“It’ll get a little bit more difficult in the fall when final decisions are made and when the actual writing, the words, are written,” said Collender, a partner at Qorvis Communications.