WASHINGTON - With his choice of Jacob Lew to be the secretary of Treasury, President Obama on Thursday will complete the transformation of his economic team from the big-name economists and financial firefighters hired four years ago to budget negotiators ready for the next fiscal fights in Congress.
If confirmed by the Senate, Lew -- Obama's chief of staff and former budget director -- would become the president's second Treasury secretary, succeeding Timothy Geithner, who was the last remaining principal from the original economic team that took office at the height of the global crisis in January 2009.
While the team is changing, so far it is made up entirely of men who have been part of the administration since its first months. Gene Sperling, like Lew a veteran of the Clinton administration, is expected to remain as director of the White House National Economic Council. Alan Krueger, a former Treasury economist, continues for now as chairman of the Council of Economic Advisers and Jeffrey Zients as acting director of the Office of Management and Budget.
Tested as early as next month
That composition gives Obama a high degree of comfort with his economic advisers, who have experience in the budget struggles that have occupied the administration since Republicans took control of the House two years ago. Those struggles will resume later this month. Yet the continuity also plays into criticism that the president is too insular.
If Lew is confirmed in time, his first test as Treasury secretary could come as soon as next month, when the administration and congressional Republicans are expected to face off over increasing the nation's debt ceiling, which is the legal limit on the amount that the government can borrow. Obama has said he will not negotiate over raising that limit, which was often lifted routinely in the past, but Republican leaders have said they would refuse to support an increase unless he agrees to an equal amount of spending cuts.
Lew was passed over for Obama's economic team four years ago, when Obama instead chose Lawrence Summers, a former Harvard University president and Treasury secretary, as director of the National Economic Council. Clinton then hired Lew at the State Department, and in late 2010 -- over the objections of Clinton, who had come to rely on Lew -- Obama made him budget director, the same post Lew had held late in the Clinton administration.
Lew in the 1980s was a longtime Democratic adviser to then-Speaker Thomas P. O'Neill, participating in fiscal talks with the Reagan administration. Lew is known for his low-key style and organizational skills.
Emphasis has shifted
While Lew has much less experience than Geithner in international economics and financial markets, he would come to the job with far more expertise in fiscal policy than Geithner did. That shift reflects the changed times, when emphasis has shifted from a financial crisis to the budget fights with Republicans.
The partisan tension suggests that Lew will be grilled by Republicans in confirmation hearings. But, Republicans have not signaled the kind of opposition they put up to some other potential nominations.
It also would create a vacancy for what would be Obama's fifth White House chief of staff. The leading candidates are said to be Denis McDonough, the deputy national security adviser, and Ronald Klain, a former chief of staff to vice presidents Joe Biden and Al Gore.
Lew briefly worked at Citigroup, first as managing director of Citi Global Wealth Management and then as chief operating officer of Citigroup Alternative Investments.
Lew has a reputation as a fiscal progressive who, like Obama, is eager to protect Medicaid and other antipoverty programs. But advocates for tighter financial regulation question whether he is too conservative.
"He appears to share a Wall Street mentality, particularly when it comes to financial reform," said Dennis Kelleher, the president of Better Markets, a nonprofit. "Financial reform is all about making the banking system safer and preventing more taxpayer bailouts."