Jack Lew: Architect of Obama's Trillion-Dollar-Deficit Budgets
No Treasury Secretary would better embody the president's fiscal insanity.
On Wednesday, Julie Pace and Martin Crutsinger, two of the usual suspects at the Associated Press, began paving the way for what they clearly hope will be a worry-free Senate confirmation of current Obama administration Chief of Staff Jack Lew to become the nation’s next Treasury Secretary.
Towards that end, the AP pair larded on the compliments and historical revisionism with reckless abandon. Among other things, their report lauded Lew as ”one of Washington’s most knowledgeable budget experts to manage prickly fiscal negotiations with Congress and steer the still-shaky national economy”; said that he would “bring to Treasury a mastery of federal budget mechanics”; claimed that he had “helped negotiate a balanced budget agreement with Congress, something that has eluded Washington ever since”; and described Lew as “a pragmatic liberal … [who] is well-liked in Washington by both Democrats and Republicans[.]“
Along the way, Pace and Crutsinger couldn’t make up their minds about the current condition of the economy. After the “still-shaky” characterization just noted in their first paragraph, they later evaluated it as “now stabilized, if still sluggish.” Those two conditions can’t exist at the same time, given that “shaky” is an antonym of “stable.” Although it would have required more verbiage, the AP pair should have characterized the current economy, as a result of the derelict stewardship of Obama, the soon-departing Tim Geithner, and Fed Chairman Ben Bernanke as “the worst since Franklin Delano Roosevelt needlessly extended the Great Depression by over eight years during the 1930s.“ Because it is.
The AP also decided to have a little fun with Lew’s signature, which will appear on the nation’s currency if he is confirmed, commenting in a separate item that his sign-off, a ”J” followed by “seven loopy scribbles,” is “illegible.”
What’s really loopy is AP’s collection of contentions about Lew.
Lew may actually be “knowledgeable” and have a “mastery of federal budget mechanics,” but he hasn’t demonstrated either. As Director of the White House Office of Management and Budget in early 2011 following service in that same position during Bill Clinton’s final 32 months in office a decade earlier, Lew was the primary compiler of that February’s proposed White House Budget. That document blessed the idea of running a full-year fiscal 2011 deficit of $1.645 trillion while coveting $1.5 trillion in taxes over the next 10 years beyond those already locked in by the previous year’s passage of ObamaCare.
An Investor’s Business Daily editorial made mincemeat of Lew’s handiwork, correctly describing it as “gutless” because it chose to do nothing about runaway entitlement spending, even with the available political cover of Obama’s own Simpson Bowles Commission. That panel had recommended sweeping changes to the Social Security system and significant Medicare and Medicaid reforms just two months earlier.
As to Lew’s vaunted negotiating skills, give me a break.
The Clinton administration’s agreement with Congress early in his second term did balance the budget and generate surpluses for a few years, but Lew’s role appears to have been minimal. The key players in that drama were then-Congressman, now Ohio Governor John Kasich and House Speaker Newt Gingrich. The AP itself in 2009 acknowledged Kasich’s role as “chairman of the U.S. House of Representatives’ Budget Committee in 1997 that balanced the nation’s budget for the first time in more than 30 years.”
Jack Lew did not become Bill Clinton’s OMB Director until May 1998. Concerning 1997, when the measures which ultimately led to a balanced budget became law, including the reduction in the capital gains tax which caused related tax receipts to skyrocket during the next several years, Lew’s Wikipedia entry currently only says that he “frequently served as a member of the Administration negotiating team.” Big whoop.
When he has been a player in negotiations, he has been anything but constructive. Breitbart.com’s Joel Pollak noted on Wednesday that, according to Bob Woodward’s book, The Price of Politics, Lew “so irritated congressional Republicans during debt ceiling negotiations in 2011 that Speaker of the House John Boehner personally asked Obama to exclude Lew from the talks.” Pollak believes that the Lew nomination “is a clear sign that he intends to drive a hard bargain with Republicans and that he is even less interested in compromise than he was during his first term.” It’s hard to see how he could be wrong. So if you thought Geithner’s condescending, punkish comment to Congressman Paul Ryan about Ryan’s plan to prevent the country’s deficit- and debt-driven financial implosion was bad – “we (don’t) have a definitive solution … What we do know is, we don’t like yours” – you probably haven’t seen anything yet.
AP’s suggestion that Lew is “pragmatic” is nonsense. In early 2011, Lew showed himself to be beyond doubt a doctrinaire leftist unconcerned with facts or the truth.
It all began when a USA Today editorial called Social Security’s trust fund, “at least in cash terms, a fiction,” correctly asserting: “In reality, the trust fund is no more than a collection of IOUs.” (More on Social Security’s dire situation can be found in my Tuesday FrontPage column, “Social Security: Even More Insolvent Than You Thought.“)
Lew took umbrage at USA Today’s contention in an opposing column there. Included in his collection of laughable claims were these howlers: “Social Security does not cause our deficits,” and “Social Security benefits are entirely self-financing.”
That was too much for Washington Post syndicated columnist Charles Krauthammer, who flung verbiage from Clinton-era reports issued by Lew’s own OMB back in his face:
… listen to the OMB’s own explanation (in the Clinton administration budget for fiscal 2000 under then-Director Jack Lew, the very same). The OMB explained that these trust fund “balances” are nothing more than a “bookkeeping” device. “They do not consist of real economic assets that can be drawn down in the future to fund benefits.”
In other words, the Social Security trust fund contains - nothing.
Lew doubled down a day later while attacking Krauthammer at the White House’s OMB blog. In addition to repeating the lies contained in his USA Today column, he also blamed the country’s budget problems on “the tax cuts of 2001 and 2003 and the Medicare prescription drug benefit.” Unfortunately for Lew, federal collections rose by 44% from fiscal 2003 through fiscal 2007 after those cuts took full effect, and the federal budget was within $163 billion of achieving balance in fiscal 2007. As to the drug benefit, also known as Medicare Part D, it was indeed an ill-advised move by the Bush administration and the Republican Congress, but competition-enhancing aspects of that law have caused the program’s costs to rise at a much lower annual rate than health care costs in general.
Krauthammer got in the last word in his next column, correctly arguing that Lew’s false arguments justify “precisely the kind of debt denial and entitlement complacency that his boss is now engaged in.”
The Lew nomination tells us that we can expect four more years of “debt denial and complacency.” Moves like this lend further credence to the idea that Obama really doesn’t mind if the country falls apart financially by the time he leaves the White House – assuming he plans to.
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