Geithner, Summers have eye for stimulus, restraint
A key third member of the economic team is expected to be introduced today.
WASHINGTON (AP) — Barack Obama will spend billions on the economy. Barack Obama will exercise fiscal restraint.
In the president-elect’s new economic team, these are not mutually exclusive views of the world.
The leadership of the economic team Obama introduced Monday embraces a view that an economic crisis of the proportion now seizing the country requires a massive injection of money into a teetering system.
But Timothy Geithner and Lawrence Summers also are pragmatic centrists who share a distaste for large government deficits and have warned about serious long-term problems with fiscal policy even before the baby boom retirements hit their stride.
The result is that Geithner, Obama’s selection for secretary of the treasury, and Summers, who will lead Obama’s National Economic Council, would be reassuring economic and political voices for the incoming Obama administration.
“No one can accuse these guys of being particularly reckless,” said Jared Bernstein, a senior economist at the liberal Economic Policy Institute and an informal economic adviser to the Obama campaign. “When it comes to proposing fairly significant government intervention, I suspect these guys will have lots of credibility.”
A key third member of Obama’s economic team, Peter Orszag, is expected to be introduced by Obama today as his new director of the White House Office of Management and Budget. Orszag has been the director of the Congressional Budget Office since January 2007. Like Summers and Geithner, Orszag is closely linked to former Clinton administration Treasury Secretary Robert Rubin, known for his emphasis on fiscal responsibility.
The stock market surged Friday when word of Geithner’s appointment first became news. Key congressional Republicans also reacted positively to Obama’s selections Monday.
Sen. Judd Gregg, R-N.H., the top Republican on the Senate Budget Committee, said Geithner and Summers mean “we will continue to see a clear commitment by the federal government and the new administration to do whatever is needed to ensure the solvency and orderly functioning of the credit markets and key institutions that underwrite and energize businesses across the nation, from Wall Street to Main Street.”
As prot g s of Rubin, the key figures of Obama’s team do not hew to the liberal- or labor-driven wing of the party. It was Rubin who pushed President Bill Clinton to put off middle-class tax cuts in 1997 in favor of balancing the budget.