Jack Lew Named New OMB Director

President Barack Obama named Jacob ‘Jack’ Lew, a State Department official and adviser for Secretary Hillary Clinton, to head the White House Office of Management and Budget [OMB].

“The experience and good judgment Jack has acquired throughout his impressive career … will be an extraordinary asset to this administration’s efforts to cut down the deficit and put our nation back on a fiscally responsible path,” Obama said Tuesday.

Lew, who is replacing outgoing Director Peter Orszag, is no stranger to the role.  Under the Clinton administration, Lew served as OMB Director from 1998-2001.

“If there was a Hall of Fame for budget directors, then Jack Lew surely would have earned a place,” Obama said, noting the over $1 trillion Clinton-era surplus generated under Lew’s stewardship.

Orszag issued a statement applauding the decision.

“With his experience, mastery of the budget process, and passion for public service, Jack Lew is an individual especially qualified to serve the President and the American people during these challenging economic times,” Orszag said.

Orszag will leave the administration at the end of the month.



OMB Director Says More Must Be Done For Long-Term Deficit Reduction

By Benny Martinez - University of New Mexico/Talk Radio News Service

U.S. Office of Management and Budget (OMB) Director Peter Orszag said Thursday that the steps currently being taken to reduce the national deficit, although effective, are not enough.

The 2001 and 2003 tax cuts to those who have an income of $250,000 or more will expire as scheduled, Orszag said. In the coming decade, this will reduce the deficit by nearly $700 billion.

Transitioning to a clean energy future by eliminating fossil fuel subsidies delivered through the tax code will reduce the deficit by about $40 billion in the next ten years.


And the three-year freeze of non-security discretionary spending will further reduce the deficit an additional $250 billion, solidifying a $1.2 trillion reduction in national deficits.

“Even with that $1.2 trillion in deficit reduction, the deficit remains higher than we’d like it to be,” Orszag said. “[This] is why we are calling for the creation of a bipartisan fiscal commission to put forward recommendations to get us the rest of the way to a stable debt trajectory.”

Orszag added that this would involve overall deficits of roughly 3 percent of the economy by 2015.

According to Orszag, deficit reduction is evident in the coming decade but he remains skeptical about the long-term fiscal challenge, saying that the root cause of the country’s deficit is the rate at which health care costs are growing.

“We are eager to continue to work with Congress to finally enact comprehensive health reform legislation, Orszag said. “[This] helps to reduce the deficit, not only over this decade, but equally important, puts in place the infrastructure that will allow us to decrease deficit by increasing amounts thereafter.”

Orszag Promotes Cost Containment Measures In Senate Health Care Bill

White House Office of Management and Budget Director Peter Orszag attempted Wednesday to mitigate cost concerns surrounding the Senate’s health care reform legislation, explaining that significant measures have been put in place to ensure fiscal responsibility.

“The bottom line is the bill that is currently on the Senate floor contains more cost containment ... than any bill that has ever been considered on the Senate floor. Period,” said Orszag during a media breakfast hosted by health policy journal Health Affairs.

One key cost containment measure outlined in the Senate bill is the establishment of an independent commission dedicated to reducing Medicare costs. Orszag noted that while he was pleased the committee was included, it could eventually be strengthened.

Orszag reminded reporters that both the House and Senate bills are being subjected to paygo provisions, which means that costs from the bills will be offset by making reductions elsewhere.

The director took issue with the amount of attention the public option has received in the health care reform debate and expressed concern that Americans may be neglecting more important issues addressed by reform, such as regulations arising from the exchange that will provide more competition among insurance providers and ultimately lower premiums.

The nation's ongoing struggle

The Senate Budget Chairman Kent Conrad (D-N.D.) and Senator Michael Crapo (R-Idaho) led a discussion on “Approaches to ‘Bending the Growth Curve’ on Healthcare Spending.” Both Senators agreed that healthcare is the single largest threat to long term fiscal outlook and that the most affective way to end the “nation’s ongoing struggle” is to gain bipartisan support.

Peter Orszag, of the Congressional Budget Office, said that the United States’ political system does not deal well with gradual, long term problems, which is what the healthcare issue has turned into. He explained that the nation needs much more information on what works and what doesn’t when it comes to healthcare, needs more financial incentive to make a change, and needs a behavior change into a healthier lifestyle.

Elliot Fisher, of the Dartmouth Institute for Health Policy and Clinical Practice, said that the United States needs to focus on supply sensitive services. He explained that the current system rewards growth and spending, a policy that needs to be changed. Fisher also said that there are three main healthcare areas that need attention: payment, capacity, and clinical judgment.

Scott Serota, of the Blue Cross and Blue Shield Association, said that there is generally uniformity and agreement on the healthcare issues, and asked “why aren’t we doing it?” Serota had four recommendations on the areas that he thought needed focus. He said that research on “what really works” needs to be encouraged, there needs to be a change in incentives, consumer and providers needs to be empowered to make good decisions, and a focus on health and wellness needs to be promoted.