Obama Nominee Shares|Ideas on Federal Deficit

     WASHINGTON (CN) – President Obama’s nominee to lead the Office of Management and Budget, Jacob Lew, told a Senate committee Thursday that he planned to get the $1.3 trillion federal deficit under control by putting in place policies that would make a difference “over the horizon.”

     “There is no doubt that we are not in a sustainable fiscal situation right now,” Lew said during his confirmation hearing before the Senate Budget Committee.
     “We can’t put off for years worrying about the deficit,” he said. Lew shared senators’ objectives of getting the federal deficit down from 10 percent of the nation’s GDP to 3 percent.
     Lew defended stimulus spending enacted by Obama when the president first took office, saying it was necessary to get the economy out of the recession.
     “It was essential to add to the deficit at the beginning of this administration,” Lew said. “That was the exception to the rule. That was the way to stimulate the economy.”
     But he said the next step was to “put policies in place now that will deal with deficit over the horizon.”
     And he warned that there was no “silver bullet” to solve the current fiscal situation, echoing the words of Obama. He said it would take a broad array of measures over a long period of time to balance the budget.
     Lew previously served as director of the Office of Management and Budget under President Clinton. He came to the position facing a federal deficit of $300 billion, which he helped turn into a record surplus for three consecutive years.
     Senators praised him for his work during the Clinton era and asked if he could do it again. Lew said the success during the Clinton years was due to fiscal discipline that was largely a part of the culture of the time. The government had PAYGO rules in place, in which new policies had to be offset by cuts in other areas. He said the budgetary success was due to a culture of “sustained focus” from 1993 to 1997.
     “It’s as much psychology as it is math,” Lew said.
     He said the lapse of PAYGO rules, funding two wars, an economic downturn and a period of spending without offsets led to the current fiscal situation.
     “An awful lot of it was a lack of discipline and not paying for policies as they were being made,” he said. “In the 1990s, the key was we stayed at it and we got the job done.”
     Lew said one of the biggest considerations now is how to inspire confidence in government among the business community, giving businesses the certainty to release dollars that are “sitting idle.”
     If confirmed, Lew, who is currently the Deputy Secretary of State for Management and Resources, would replace Peter Orszag, who left in July.

%d bloggers like this: