Lew in 2010: Obama’s Deficits Cannot Become the ‘Normal Rule’
(CNSNews.com) – Jack Lew, chief of staff to President Barack Obama, former director of the Office of Management and Budget (OMB), and now the president’s pick to lead the Treasury Department, told the Senate Budget Committee in 2010 that the deficit spending practiced by the administration could not become the “normal rule” in Washington or the country would head down “a path that goes nowhere good.”
“In order to create millions of jobs, in order to create economic growth where it did not exist, it was, I think, critically important at the beginning of this administration to actually increase the deficit. That was the exception to the rule. That was the way to stimulate the economy. It cannot become the normal rule. If it becomes the normal rule, we are on a path that goes nowhere good,” Lew said during his confirmation hearing as OMB director in September 2010.
Lew also said that, in the future, government must weigh spending decisions against its ability to pay for that spending, stressing that while Obama’s deficits were necessary to recover from recession they were exceptions to that rule.
“I believe that, as we go forward, it is critical that we ask ourselves every time how are we going to pay for the things that we want to do? But I also think it is important to distinguish the actions that were taken to respond to the fiscal crisis from normal spending,” Lew said.
Lew, as OMB director from November 2010 to January 2012, was responsible for putting together the White House’s yearly budget proposals, which have continued the very type of deficit spending that Lew characterized as leading “nowhere good.”
For fiscal year 2013, Lew proposed a budget running a deficit of $901 billion. For fiscal year 2012, Lew proposed a budget that ran a deficit of $1.1 trillion. The administration’s budget for fiscal year 2011, which would have been written partly before Lew was confirmed as OMB director in 2010 but released after he had been confirmed, proposed a deficit of $1.3 trillion.
The federal government has run $1-trillion-plus deficits for the last four years, including during the years that Lew served as OMB director.
Timothy Geithner, who has served as the Treasury secretary since January 2009, is expected to announce his resignation from the position in the coming weeks.