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Opposition Grows As Jack Lew Proves He Doesn't Understand Budgets
By Jeff Reynolds on January 14, 2013
Jack Lew, President Obama's choice to replace Timothy Geithner as Treasury Secretary, has been in Washington DC a long time. Anyone in public service that long will have quite a record of public statements that will paint an accurate picture for Senators who are considering his nomination. Last week, I wrote about some of the more outrageous statements Lew has made, and the lack of confidence some elected officials have shown in his ability to faithfully execute the cabinet position to which he has been nominated.
The drumbeat of doubt against Jack Lew is continuing to build. First it was Jeff Sessions, the top Republican on the Senate Budget Committee, who voiced strong opposition to Lew's nomination. A day later, Senator Mike Lee (R-UT) released the following statement:
“As the country struggles with a painfully slow economic recovery, Washington needs leaders who are willing to support reforms that will put us on a sustainable fiscal path,” said Lee, a member of the Joint Economic Committee. “Unfortunately, the nomination of Jack Lew as Secretary of Treasury signals that the president will continue to pursue the same failed policies of the previous four years: higher taxes, more spending, and more debt. It virtually guarantees the president will not compromise on entitlement reform, and assures that the White House will fight to maintain the status quo of our deeply dysfunctional system. At a moment when the president could have shown a willingness to work with Republicans to fix the challenges that face the country, he has instead moved in a disappointing direction.”
This opposition from the right has centered around Lew's continued insistence that the Obama budgets, famously rejected in Senate votes that received zero votes in 2010 and 2011, will balance and will reduce the federal public debt under the creative accounting gimmick, "primary balance theory":
“Our budget will get us, over the next several years, to the point where we can look the American people in the eye and say we’re not adding to the debt anymore; we’re spending money that we have each year, and then we can work on bringing down our national debt.” – OMB Director Jack Lew, CNN’s State of the Union, February 13, 2011
However, Lew's very own Office of Management and Budget has figures that belie that claim. Under Obama's proposals, advanced by Jack Lew, the annual budget deficits are projected to remain at absurdly high levels - between $600 and $700 Billion over the next ten years, culminating in a $774 Billion deficit for fiscal year 2021. This will, predictably, not result in debt reduction. Rather, under these proposals, our total federal debt is projected to exceed $26 Trillion by 2021. As a percentage of our gross domestic product (GDP), the total debt is projected to remain at 106% of our total economic output.
Lew cannot escape the math. He's either grossly incompetent or deliberately misleading the public.
Incidentally, even liberals are opposed to this nomination, though for opposite reasons:
One might think that Jack Lew, a man who was mentored by the late liberal Sen. Paul Wellstone and who interned for Eugene McCarthy, would be the kind of nominee self-described socialist Sen. Bernie Sanders (I-VT) might passionately support. Not so.
On Thursday, Mr. Sanders issued a statement opposing the Jack Lew nomination:
“At a time when the middle class is collapsing and millions of workers are unemployed, I do not believe he is the right person at the right time to serve in this important position…As a supporter of the president, I remain extremely concerned that virtually all of his key economic advisers have come from Wall Street. In my view, we need a treasury secretary who is prepared to stand up to corporate America and their powerful lobbyists and fight for policies that protect the working families in our country. I do not believe Mr. Lew is that person.”
For many reasons, it looks like Jack Lew's nomination will continue to see strong opposition. In fact, FreedomWorks is urging all its activists to tell their Senator to oppose this nomination. Please click here for more information on what you can do to get involved.