Budget nominee calls for bipartisanship on 'unsustainable' deficit

President Obama’s nominee to be the next White House budget director says more bipartisanship will be needed to deal with the nation’s $13.4 trillion debt.

Jacob Lew, who was budget director for former President Clinton, pointed to agreements in 1990 between then-President George H.W. Bush and congressional Democrats and in 1997 between Clinton and GOP leaders as “the right way” to tackle fiscal policy. 

He contrasted those deals with the more partisan budget passed by the Democrat-led Congress and signed by Clinton in 1993.


“I don't think we should be looking at the 1993 model,” Lew said during his Senate confirmation hearing Thursday. “We should be looking at 1990 and 1997. ... I think that's what's good for the country.”

The nomination of Lew, who is respected by both parties for his cool competence, received bipartisan support Thursday. Senate Budget Chairman Kent Conrad (D-N.D.) called Lew “the ideal person to lead this agency,” while Sen. Judd Gregg (R-N.H.) praised him for being willing to take on a tough job.

“He's done it once, he's here to do it again,” Gregg said. “I may question his thought process, but it's great [that he’s willing to serve].”

Lew was the director of the Office of Management and Budget in the late 1990s, when the economy was booming and the federal budget went from deficit to surplus. He would have a much more difficult time getting the nation’s fiscal house in order this time around. 

The economy has struggled to rebound from a recession and debt is on an unsustainable upward path, a fact that Lew himself acknowledged Thursday. Deficits are projected by the Congressional Budget Office to average nearly $1 trillion under Obama policies over the next decade. This year’s budget gap is expected to approach nearly $1.4 trillion, which would be equal to nearly 10 percent of gross domestic product. Economists consider a deficit equal to 3 percent of GDP to be the maximum sustainable level.

Lew said policymakers should focus on economic growth and worry about the deficit later.


“Our first task is to sustain and deepen the economic recovery to spur new job creation in the face of unsustainable budget deficits,” he said. “At the same time ... it'll take tough choices and putting partisanship aside to do what's right for the country today, what's right for our children and what's right for our grandchildren.”

Lew, however, urged lawmakers to send a “signal of real confidence” to markets that the government will deal with the deficit “right over the horizon.” 

“The size of deficits and lack of serious conversation about how to reduce it causes a great deal of unease and uncertainty,” he said. Those were among the reasons businesses have built up reserves of cash that could otherwise be invested, he said.

Lew is currently the deputy secretary of state for management and resources. He won Senate confirmation early last year on a voice vote.

When pressed by senators over how he would advise the president on the deficit, Lew pointed to the president’s bipartisan fiscal commission, which has been tasked with producing a deficit reduction plan.

Sen. Bill NelsonClarence (Bill) William NelsonThe Hill's 12:30 Report - Presented by Facebook - Divided House on full display Florida Democrats mired in division, debt ahead of 2022 Centrist Democrats pose major problem for progressives MORE (D-Fla.), who has supported the commission, questioned whether GOP leaders and the president could work together after the November election, when the commission is expected to issue its report.

Lew noted that bipartisanship on fiscal issues has materialized before.

“We have almost always been surprised by unlikely allies coming together when there's real bipartisan process,” he said. “People were surprised when President Reagan and Speaker [Tip] O’Neill came together in 1983, and when President Clinton and Speaker [Newt] Gingrich came together in 1997.”