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Liberals Hated Daley, But Will They Like Lew Any Better?

Before we get to whether liberals will warm to Jack Lew, the incoming White House chief of staff, in a way they never did to his just-ousted predecessor, Bill Daley, it's worth pointing out that Lew is absolutely beloved by the president and the top West Wing operatives. He’s an egoless Obama-type guy with something the president appreciates almost as much as the low profile: Deep, institutional knowledge of Capitol Hill and the way money is doled out there. 

It was Lew who devised and, along with White House congressional liaison Rob Nabors, executed the strategy of accepting large-looking cuts to the 2011 budget—that’s the one Republicans nearly shut the government down over last March and April—while implementing the cuts in ways that avoided real pain. (Much of the phantom cutting affected money that had been assigned to certain “mandatory” spending programs, like children’s health insurance, but wasn’t likely to be spent in 2011 anyway.) In this way, the president was able to give John Boehner and the House Republicans the $38 billion in cuts they were demanding, while mostly shielding the fragile economy. As one top White House official put it while I was reporting out my forthcoming book on Obama’s economic team, “Look at the deal. Boehner and his guys got snookered by Rob Nabors and Jack Lew. … We protected what we wanted to protect.” (Anyone interested can pre-order my book on Amazon so they get it on Feb. 28.)

As for whether liberals will warm to Lew, my reporting suggests it could cut either way. On the one hand, Lew has a well-deserved reputation for defending programs that serve the poor, particularly Medicaid. On the other hand, as I elaborate on in my book, Lew and Treasury Secretary Tim Geithner were the administration’s chief proponents of accepting cuts to Medicare during last year's ceaseless deficit-bargaining with Republicans. Lew's enthusiasm for making a deal on Medicare was such that it prompted considerable grumbling in progressive circles. 

There’s also the question of whether accommodating the GOP’s demands for large-looking cuts, even while minimizing them in practice, was as successful strategically as it was tactically. One could argue, after all, that the approach shifted the conversation entirely in the direction of cuts for much of the year, which wasn’t exactly a smashing success. I litigate this at some length in the book. (In fairness, the top political operatives, like David Plouffe and Daley, deserve much more credit/blame for the strategic portion of this calculus than Lew, who was operating on a more tactical level.)

For what it’s worth, one thing I don’t think liberals should get too exercised about, though they probably will, is Lew’s tenure at Citigroup, where he worked between 2006 and 2008. Lew was basically the chief administrator at Citi Alternative Investments, which runs the company’s portfolio of hedge funds and private-equity funds. That is, he was the guy who kept watch over the books and the paperwork, not a guy going out and placing multimillion-dollar bets or making hundred-million dollar deals. “He was not commercial,” one former Citi colleague told me for my book, using the Wall Street term of art for “business-minded.” “You’d trust him with your life, but he was not commercial.” 

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