Obama unveils new treasury secretary

Friday, January 11, 2013

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WASHINGTON, US (AFP) — President Barack Obama was to unveil Washington veteran Jack Lew as his new Treasury Secretary yesterday, as he girds for a new spending showdown with Republicans early in his second term.

Obama will formally nominate Lew, his current chief of staff, to succeed Timothy Geithner, a key player in his efforts to salvage the US economy, in the East Room of the White House at 1:30 pm, a US official said.

"Jack Lew will bring an impressive record of service in both the public and private sectors for over three decades and economic expertise to this important role," the official said.

"His deep knowledge of domestic and international economic issues will enable him to take on the challenges facing our economy at home and abroad on day one."

Lew, 57, is a classic Washington insider, who will not need to get up to speed on the complex budget, tax and economic rows consuming Washington — one reason why Obama may have leaned toward him.

Lew has twice served as Director of the Office of Management and Budget — for Obama and under Bill Clinton.

His nomination — which must be confirmed by the Senate — will come in a week in which Obama rounded out his second-term national security team, notably picking former Republican senator Chuck Hagel as his new defence secretary.

Another member of Obama's economic team, Labour Secretary Hilda Solis, made clear Wednesday that she would not be back for Obama's second term.

Obama praised the Hispanic former lawmaker as a "tireless champion for working families" and said she had been a critical member of his team in helping the economy recover from the worst recession since the 1930s.

Sources familiar with Lew's situation highlighted elements of his résumé relevant to the tough situation he would inherit, with Obama and Republicans feuding over taxation and spending crises coming to the boil.

They noted that under Clinton, Lew was part of the team which negotiated a deal with a Republican Congress to balance the US federal budget, which created a surplus, in contrast to today's $1-trillion-plus deficits.

As head of the Office of Management and Budget, Lew led negotiations earlier in Obama's first term to cut spending with Republicans and helped frame deficit cutting plans. He has also served as a deputy secretary of state.

If confirmed by the Senate, Lew would take the helm as Obama is locked in a row with Republicans over his demands for a raising of the current $16- trillion borrowing limit, without which Washington could default on its debt.

He would also face other clashes with congressional Republicans on huge automatic 'fiscal cliff' spending cuts put off during a New Year political crisis for two months but due to reach fruition again at the end of February.

Geithner made it known that he did not want to serve a second term at Treasury. He is expected to leave by month's end.

The Treasury secretary had previously delayed his departure to help Obama maintain the economic recovery and play a major role in the successful effort to avert the fiscal cliff budgetary crisis.




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