Created by on 9/17/2010 12:00:00 AM

Jacob Lew, President Obama’s nominee to be Director of the Office of Management and Budget, appeared before two Senate Committees on September 16th to answer questions about his budget philosophy and explain his key priorities for the agency should he be confirmed. In front of the Senate Budget Committee, Lew said, “…we must put our nation back on a sustainable fiscal course in the medium-term while making investments critical to long-term economic growth.” During questioning, the nominee discussed the challenge of reaching sustainable levels of debt and deficit, support for the bipartisan deficit reduction commission, the need to reduce healthcare costs, and the potential benefits of a biennial budget process. In response to an inquiry regarding the Obama administration’s request to move Pell Grant funding from discretionary to mandatory spending, Lew stressed the importance of the program and indicated he would accept the proposal as long as the costs are offset. At the conclusion of the generally positive hearing, Committee Chairman Kent Conrad (D-ND) said he intends to act expeditiously, planning a committee vote early next week.

Later in the day, Mr. Lew testified in front of the Senate Homeland Security and Governmental Affairs Committee, where he noted that President Obama had asked him to serve as Director at a time very different from when he last held the position in the Clinton Administration. Referencing the economic downturn, Lew pledged to work in a bipartisan fashion and said the current challenge is how to sustain and deepen economic recovery and spur new job creation in the face of unsustainable budget deficits. He also stated that the process of forging consensus behind priorities, directing new resources where they are most critical, and finding internal savings to support new initiatives, is a universal issue affecting both the federal government and the private sector.

Following his formal testimony, the nominee faced a series of questions similar to those he received from the Senate Budget Committee at the earlier hearing. In addition, committee chairman Senator Joe Lieberman (I-CT) asked Mr. Lew if he agreed that the immediate priorities for the Obama Administration should be focused on economic growth and job creation. Ranking member Susan Collins (R-ME) inquired whether he would support a proposal drafted by Senators Claire McCaskill (D-MO) and Jeff Sessions (R-AL) to freeze discretionary spending for fiscal year 2011 at current levels. Lew responded that “caps on discretionary spending, when part of an overall budget agreement, are very effective,” and that “the right place to have the debate about long term caps on discretionary spending is when everything is on the table.” He also noted that “discretionary spending is a small part of the total problem regarding the deficit and if we don’t address other forms of spending and the tax system we won’t be in a place where we can turn the corner.” At the conclusion of the hearing, Senator Lieberman indicated that the Homeland Security and Governmental Affairs Committee would also move quickly to confirm Lew as the Director and indicated a vote could take place early the week of September 20th.