“It’s an accurate statement that our current spending will not be increasing the debt… We’ve stopped spending money that we don’t have.”
-- Jack Lew, then director of the Office of Management and Budget, in Feb. 16, 2011 testimony before the Senate Budget Committee.
How does a budget blueprint that would add $13 trillion to the federal debt not add money to the national debt?
That’s the main question for Jack Lew, the White House chief of staff and President Obama’s nominee to lead the Treasury Department, when he heads to Capitol Hill today for confirmation hearings.
He will face lots of questions, to be sure.
There will be inquiries about his very lucrative layover at Citigroup between stints in government, including a $940,000 bonus he received just before the ailing bank got a government bailout. What did he do there? What was his role in amassing bad mortgage debt that caused the Panic of 2008?
This goes to the issue of what Lew knows about finance. He is undoubtedly an expert on fiscal issues, having led the Office of Management and Budget for Obama and for President Bill Clinton, but what does he know about the private sector other than the fact that big, highly regulated banks in need of government assistance like to hire powerful government officials?
Senators will also want to hear about why Lew opted to shelter his wealth from the very department he now seeks to lead by dumping it in the Cayman Islands. If Obama said taking advantage of offshore tax havens was a sign of low character in Mitt Romney, why shouldn’t it be the same for Lew?
Also on the docket are questions about why the president has ignored the law on budget and fiscal matters, declining to produce a budget so far this year and flouting a law that requires him to offer a solution when the Medicare trust fund is running dangerously low.
There will be questions too about fiscal policy and the mounting, mounting, mounting federal debt. If Lew is conformed, he will be the one issuing the bonds that will finance what is expected to be a minimum of $4 trillion in additional borrowing during the president’s second term.
And with negotiations ongoing over the next fiscal crisis – across-the-board spending cuts agreed to in the negotiations over the 2011 debt-limit deal – Lew’s answers will give us some insight on what the president, who has been vague on the subject, is really thinking.
Lew may be an unusual Treasury nominee in that he lacks much experience in the private economy and he may have taken a Caribbean tax dodge and he may have no interest in Republican demands for cutting spending, but none of that disqualifies him from being heir to Alexander Hamilton.
The big problem for Lew, though, are comments he made as Obama’s budget boss claiming that Obama’s fiscal plan would lead to an end of borrowing and eventual debt reduction.
Sen. Jeff Sessions, the Alabama Republican who serves as the ranking Republican on the Senate Budget Committee has accused Lew of “deliberate artifice,” in claiming two years ago that Obama’s plan led to balanced budgets.
While much of the questioning today will take the form of speechifying by Republicans and praise heaping by Democrats. Sessions doesn't serve on the Finance committee that will question Lew today, but the former Alabama federal prosecutor is still making life difficult for Lew. Sessions is no showboat, but has laid a trap for Lew with the Republicans on the Finance Committee.
Democrats say that it was okay for Lew to make the balanced budget claim under oath and on television because he believed that Obama’s plan would so stimulate the economy that revenues would exceed expectation that could be plotted on a budget graph.
But Sessions, having accused Lew of lying under oath, is counting on his colleagues to build his case one question at a time.
It’s unlikely that the interrogation will change many minds about the controversial nominee. If happy talk about fallen federal finances were a crime in Washington, there wouldn’t be enough members of Congress left to get a quorum.
But it will lay the groundwork for an eventual filibuster of Lew’s nomination. When a powerful, high-ranking Republican says someone lied, his fellow Republicans will have to render their own judgment on the subject. Unlike their evaluation of Defense nominee Chuck Hagel’s horrible testimony, this one is not subjective. Sessions has made the matter black and white and his colleagues will have to choose one side or the other.
Lew is hoping to move from the bean-counter brigade where he has spent most of his 40-year career into the realm of policy and power. He will find that the stakes and consequences are much higher for the ones borrowing and spending the beans rather than just counting them.
And with much eye rolling about Obama’s claims in his State of the Union speech that his new spending proposals wouldn’t add “one dime” to the debt, it’s a difficult moment for Lew to face Sessions' trap.
Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30amET at http:live.foxnews.com.
Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as politics editor based in Washington, D.C. Additionally, he authors the daily Fox News Halftime Report political news note and co-hosts the hit podcast, Perino & Stirewalt: I'll Tell You What. He also is the host of Power Play, a feature video series on FoxNews.com. Stirewalt makes frequent appearances on network programs, including America’s Newsroom, Special Report with Bret Baier and Fox News Sunday with Chris Wallace. He also provides expert political analysis for FNC’s coverage of state, congressional and presidential elections.