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Lew’s portfolio will be at the heart of Obama’s second term agenda. Fresh from difficult talks to prevent a U.S. “fiscal cliff,” the president has made deficit reduction a top priority for the next four years.
Republicans, many of whom were unhappy with the pact agreed on New Year’s Day that raised tax rates for the wealthiest Americans, are unlikely to block his nomination.
“I don’t think Republicans are terribly excited about the pick, but I don’t think that they’ll do anything to derail the nomination,” said Michelle Girard, a senior U.S. economist at RBS. “I think that he’ll be confirmed and they’ll go on to the battles that need to be fought.”
Three fiscal deadlines loom.
By the end of February, Congress must raise the $16.4 trillion debt ceiling on how much the Treasury can borrow or risk a damaging debt default.
On March 1, deep automatic spending cuts to defense and to a wide swath of domestic programs start to go into effect unless Congress acts.
And at the end of March, a stop-gap funding measure expires and the government could be forced to shut down if Congress does not approve another bill to fund federal operations.
Geithner, who survived calls for his resignation and bore the brunt of the criticism for how the Obama administration handled the financial crisis, managed to win over Republican lawmakers in his four years as Treasury secretary.
Late last year, Obama picked Geithner over Lew to lead talks with Congress to avert the New Year’s day “fiscal cliff” of tax hikes and spending cuts. Lew had angered key Republicans during budget negotiations in 2011.
White House spokesman Jay Carney declined to confirm news of Lew’s appointment, but praised him during a briefing with reporters.