Obama’s Jack Lew Nomination Is a Warning Shot to Republicans

Last updated on September 25th, 2023 at 01:36 pm

With his appointment of his chief of staff Jack Lew as Treasury Secretary, Obama made it clear that he meant it when he told Republicans he wouldn’t be “negotiating” over the debt ceiling. Lew has a reputation as a tough negotiator.

Lew served as the director of the Office of Management and Budget before Obama tapped him as his chief of staff, and Lew also served in that capacity under Clinton. Yes, Lew presided during the Clinton surplus. In negotiating with the Republicans under Clinton, it seems Clinton and Yew got the best of the GOP on the budget when it came to Social Security, “Republicans found themselves outfoxed yet again, forced to agree that they, too, want to devote the surpluses to America’s favorite federal program. Their hopes for huge tax cuts were quashed.”

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President Obama pointed out that Lew helped save Social Security during the Reagan administration, “Jack has the distinction of having worked — and succeeded — in some of the toughest jobs in Washington and the private sector. As a congressional staffer in the 1980s, he helped negotiate the deal between President Reagan and Tip O’Neill to save Social Security. Under President Clinton, he presided over three budget surpluses in a row. So for all the talk out there about deficit reduction, making sure our books are balanced, this is the guy who did it — three times. He helped oversee one of our nation’s finest universities and one of our largest investment banks.”

Exiting Secretary of Treasury Tim Geithner said of Lew, “He’s committed to defending the safety net for the elderly and the poor.” It’s no wonder Republicans don’t like Lew. Senator Jeff Sessions (R-Alabama) has already voiced his opposition to Lew’s appointment.

Politico reported that Republicans are anxious about Lew because he is against their “corporate tax reform” (aka, letting corporations off scot-free in what Republicans laughingly refer to as the “free market” — if it were really free, then all corporations would be able to compete and wouldn’t need special tax breaks/subsidies):

“Lew, according to sources, has privately expressed vocal opposition to moving toward a territorial tax system — a staple of GOP plans for corporate tax reform. But practical reasons also make a second ‘Showdown at Gucci Gulch’ unlikely. The highest hurdle to a deal, perhaps, is the fact that Republicans insist that a rewrite of the Tax Code cannot generate more revenue for the federal government — while some Democrats favor a tax overhaul that raises revenue.” Yes, you read that correctly — Republicans are insisting that we not generate any more revenue to pay down that deficit they’re allegedly so concerned about.

Jack Lew doesn’t play Republican games, and that’s why he irritates them so much. In fact, they claim Lew is just against whatever they are for (insert irony here). Republicans were reportedly aghast in 2011 when Lew told them he wouldn’t “reform” Medicare without a tax increase. Republicans are used to taking hostages — not compromising. So when the oppositions draws a line in the sand, they’re outraged.

When Lew left the OMB, he went to Citigroup, when they were betting against the housing market. This predatory money making skill should endear him to Republicans – but they’re willing to overlook this skill, given how Lew applies it to saving the social safety net.

Some liberals object to Lew because he’s a Wall Street guy, even if he’s also a Washington D.C. insider. Bernie Sanders astutely pointed out that we need someone from outside of Wall Street to tackle Wall Street. While it’s heartening that Republicans don’t like Lew because of his opposition to their desire to “reform” corporate taxes, it’s hard to avoid Sander’s assessment.

It may take an insider to really know how to reform an entity like Wall Street (gotta know where the bodies are buried), but that presumes that reforming Wall Street is the goal, and I’m not sure it is or that this is the only way to achieve that goal. Rather, it looks as if Lew was chosen because of his superior knowledge of the budget process, his past experience with Social Security and his no prisoners negotiating style. Picking Lew was a smart way for Obama to arm himself against the upcoming battles with Republicans over budgetary issues.

Lew balanced the Clinton budgets that resulted in a surplus and protected Social Security. It’s tough imagine a better person to have Obama’s back during the upcoming budget battles. The Lew pick was a definite warning shot to Republicans.

Sarah Jones

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