President Barack Obama broke the mold on Thursday by choosing a budget wonk to serve as U.S. Treasury secretary, leaving gaps on the international and financial side that could make for a rocky transition.
Jack Lew, Obama’s chief of staff, was chosen to lead the Treasury Department as the White House heads into another round of difficult talks with Congress on how to put the nation on a sound fiscal path.
By tapping a two-time White House budget director, Obama signaled the importance he places on the ongoing budget battles.
If the Senate confirms Lew, as widely expected, the budget expert’s most pressing task will be to ensure that Congress raises the nation’s debt ceiling in time for the United States to avoid a damaging default and credit-rating downgrades.
In selecting a Washington insider, Obama has potentially left the Treasury Department with holes in crucial areas: financial markets, regulation and international economics.
Obama’s outgoing Treasury secretary, Timothy Geithner, was previously president of the New York Federal Reserve Bank, where part of his job was to liaise with Wall Street and regulate big banks. He also had held top positions in President Bill Clinton’s Treasury Department and at the International Monetary Fund.
Geithner’s immediate predecessor, former Goldman Sachs CEO Hank Paulson, was also deeply steeped in the ways of Wall Street, as was Geithner’s boss during the Clinton administration, then-Treasury Secretary Robert Rubin.
“Jack Lew is by all accounts highly qualified to be secretary of the Treasury,” said Dennis Kelleher, the chief executive of the left-leaning group Better Markets, which supports tougher financial regulation.
“The one area of concern is whether or not he is sufficiently committed to quickly and thoroughly implementing financial reform and re-regulating Wall Street.”