Obama chooses Lew to head Treasury
WASHINGTON — President Obama recently said he would love to hire a top executive into his administration. But for the job of Treasury secretary, he didn't pick a corporate executive, a famous economist or a former politician — he tapped his trusted adviser, White House Chief of Staff Jacob Lew, an expert on the nation's ongoing budget wars.
Obama chose Lew to take over from Treasury Secretary Timothy Geithner, the president's longest-serving economic adviser, according to two people familiar with the pick. The selection of Lew signals that Obama's second term will not initially focus on big new ideas to create jobs or expand government investment in the economy.
Rather, it will involve a sustained conflict with congressional Republicans over the nation's finances. The government is likely to face a deadline to raise the $16.4 trillion federal debt ceiling no later than March 1 — as well as a series of deep and automatic spending cuts known as sequestration set to begin about the same time.
These battles will once again pit Democrats' economic vision against that of Republicans. Democrats say they want to raise taxes on the wealthy to shrink the deficit but reduce government spending sparingly so as to preserve funding for domestic priorities such as education. Republicans oppose new taxes, saying they would crimp economic growth, and favor deep cuts to spending.
The composition of Obama's second term Cabinet became clearer Wednesday, with Labor Secretary Hilda Solis resigning and three other members of the president's team deciding to stay on amid concerns about diversity in Obama's inner circle.
Solis, a former California congresswoman and one of the highest-ranking Hispanics in the Cabinet, said she was departing after leading the department during the economic storms of the first term. She was the nation's first Hispanic labor secretary.
A White House official said three Cabinet members — Attorney General Eric Holder, Health and Human Services Secretary Kathleen Sebelius and Veterans Affairs Secretary Eric Shinseki — would stay on as the second term begins. It would ensure diversity among the president's leadership team — Holder is black, Sebelius is a woman and Shinseki is of Japanese-American descent.