Media sources reported this week that President Barack Obama will appoint current White House Chief of Staff Jacob “Jack” Lew to succeed Tim Geithner as U.S. Treasury Secretary. Lew has long been viewed as the frontrunner to replace Geithner, who plans to retire by late January.
Chief of Staff Jack Lew has been described as "mild-mannered, well-respected, and clearly qualified" to serve as Treasury Secretary. Assuming that he survives the confirmation process, however, Lew – a Democrat – will likely face tussles with the GOP in negotiations over the "fiscal cliff" and the looming fight to raise the $16.4 trillion debt ceiling.
The U.S. reached its statute-mandated debt limit at the end of last year, and the Congressional Budget Office has projected that the Treasury will run out of funds in February. Meanwhile, the Treasury Department is using extraordinary measures to finance the government; but if Congress fails to timely increase the debt ceiling, the U.S. may default on debt payments, thereby sending global markets into a tailspin.
According to sources, Republicans – who have a majority in the House of Representatives – intend to demand major spending cuts from Democrats, in exchange for raising the debt ceiling. But if Lew becomes Treasury Secretary, the road may not be easy. Reported to have "a contentious relationship with some Senate Republicans," Lew has been called "one of the most partisan, most ideological members of the Obama team," whose nomination "represents escalation of acrimony" within the two-party system.
Lew's appointment would also mean a further reshuffling of Obama's cabinet, as the President has recently made significant changes among high-ranking positions – including the appointment of Senator John Kerry to replace Hillary Clinton as Secretary of State, as well as naming former Senator Chuck Hagel as Secretary of Defense and appointing counter-terrorism advisor John Brennan as director of the CIA.
A New York City native, Lew graduated from Harvard and Georgetown law school, launching his career early on as policy adviser to former House Speaker Tip O'Neill. Later, after time as an attorney in private practice, in 1993 Lew joined the Clinton administration as Special Assistant to the President. He then moved to the Office of Management and Budget (OMB), where he eventually became Director, serving in that post until George W. Bush assumed the U.S. presidency.
In the subsequent years, Lew worked at New York University as Executive Vice President and Chief Operating Officer (COO), and in 2006 became the COO of a division of Citigroup. Controversy later followed Lew as it was reported that he had received more than $900,000 in bonuses at Citigroup after a government bailout, although the company had sustained nearly $30 billion in losses.
After returning to government during the Obama administration, Lew soon resumed his previous post as OMB director (replacing Peter Orszag), and then succeeded William Daley as White House Chief of Staff, becoming the first Orthodox Jew to hold that position.