Who Will Be the Next Treasury Secretary? This Guy!

Moneybox
A blog about business and economics.
Nov. 26 2012 1:40 PM

Who Will Be the Next Treasury Secretary? This Guy!

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President Obama walks with White House Chief of Staff Jack Lew in March on the South Lawn of the White House

Photo by Mandel Ngan/AFP/Getty Images.

I was considering doing a post with chin-stroking speculation about who the next Treasury secretary will be, but instead let me just tell you. It's going to be Jacob Lew, the current White House chief of staff.

Why? Well, because the White House has decided that it wants the Treasury secretary to be deeply involved with budget issues, and who better than a former Office of Management and Budget director? What's more, Obama has been working with Lew for a while now and likes him, and they've been working well together. All the other ideas kicking around involve bringing someone in from the outside who'd be taking over midstream and trying to establish a working relationship with the president and the Treasury team while simultaneously hammering out thorny bargains with House Republicans. It doesn't really work.

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Which isn't to say nothing else will be considered. The administration's had a longstanding and somewhat silly desire to recruit a high-profile CEO to work in the Cabinet and "prove" that Obama doesn't hate business—he just wants rich businessmen to pay higher taxes. But CEO X, who has the policy chops to do the job and backs the Obama agenda, doesn't exist. Perhaps some lesser CEO will be persuaded to become Commerce secretary. But Treasury will be run by Lew.

Note also that chiefs of staff tend to burn out pretty quickly. If you've got one who's been in office for a while and you'd like him to not quit, then giving him a prestigious Cabinet gig (as happened to Donald Rumsfeld in the 1970s and James Baker in the 1980s) is the proven method.

What's interesting here is that Lael Brainard by all accounts won't be the next Treasury secretary. Who's Lael Brainard? She's the underscretary of the Treausury for international affairs. And guess who else used to have that gig? Tim Geithner and Lawrence Summers. In other words, the last two Democrats to have the secretary's job used to have Brainard's job. It seems like that would make her the obvious candidate, but there's zero buzz to that effect. And no real negative commentary about her—just perhaps a general (and I think misguided) sense that the international affairs brief is now less important than tax and budget issues.

So it'll be Lew. Which sets up the question of who will follow Lew as chief of staff.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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