Saturday, June 26, 2010

The Insignificance of the Peter Orszag Depature

How significant is the Peter Orszag departure as head of the Office of Management and Budget, the first Cabinet level departure in the Obama Administration?

FT thinks it's big.

They have three stories about his resignation, in this weekend's edition. The front page headline is: Orszag exit reveals deficit policy split.

FT's Edward Luce wrote:
Barack Obama’s decision to sack General Stanley McChrystal this week drowned out news of the resignation of Peter Orszag, his star budget director, and the first of his cabinet members to step down.

Orszag resignation reveals deficit policy split But the departure of Mr Orszag, who decided to resign partly in frustration over the absence of a tough plan to address America’s mounting national debt, may well come to be seen in retrospect as equally significant.
I spoke with someone earlier this week who is very close to Orszag. He told me that Orszag's departure was more about burnout than anything else. "You have to remember before OMB, Peter was with the CBO, which is another gruelling position," he said.

There's probably enough truth to this to use it as the "inside" public excuse. Indeed, Orszag seems to be using this line. He told FT:

I want to emphasise that it would be inaccurate to say that I have told the president personally that I’m leaving because of concerns about our fiscal policy.
In an earlier statement, Orszag said:

The reason I am stepping down as OMB director is that after nearly four years in government service – running CBO and then OMB – it is time for me personally to move on.
Which simply means that Orszag is not leaving in a huff and is not about to burn any bridges.Thus, although its not clear who is leaking Orszag's view to FT, it's not anyone very close to Orszag. The inside team is staying on message. Though the leaker's view is probably somewhat accurate:

Although Mr Orszag agrees with the need to push short-term spending, particularly in the Senate, which again this week failed to pass a measure extending insurance to the unemployed, the budget director has become increasingly frustrated with the administration’s caution on longer-term fiscal restraint...In particular, he has collided with the political team, led by Rahm Emanuel, Mr Obama’s chief of staff, over Mr Obama’s 2008 election pledge not to raise taxes on any households earning less than $250,000 a year – a category that covers more than 98 per cent of Americans...“Peter feels strongly that this is a pledge that has to be broken if the President is to take a lead on America’s fiscal crisis,” says an administration official not authorised to speak on the matter. 
"He felt that rather than resign in protest in January, when next year’s budget is being prepared, he would rather go amicably now.”
Orsazg's real reason is probably more complex than all this. He has struck me as more of a yes-man, than a push-man, so good luck with him going up against Emanuel. Orszag probably realized that. Further, he likely has some heavy financial obligations given his complicated personal life, that includes putting him in a race to break the record set by former NBA star, Shawn Kemp, for child support checks going in the most different directions.

The most revealing paragraph in the FT' stories about Orszag is probably the last paragraph in the last story:
Mr Orszag, whose successor has not yet been announced, will work at a think-tank before deciding on his longer-term future.

Bottom line: This means that Orszag will look at his new think-thank position as kind of a listing on Ebay thing. He'll sit back and wait for the bids to come in. And he'll try and catch the biggest wave he can. Because he hasn't burned any bridges, he will continue to have access. Somebody will pay for the access. Orszag doesn't really give two hoots about the deficit or he would speak out. He can add, he knows there's a big problem. But this guy isn't anywhere close to putting the country above personal interests. He's just another revolving door man, heading into the money side of the door.  In the big picture, he is pretty insignificant.

2 comments:

  1. Wenzel,

    I completely agree. This idea that Orszag is the only "serious" thinker there who is suddenly worried about the budget is... ignoring the fact that the man was partially responsible for the last debacle. I doubt he just saw the light all of a sudden.

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  2. "In particular, he has collided with the political team, led by Rahm Emanuel, Mr Obama’s chief of staff, over Mr Obama’s 2008 election pledge not to raise taxes on any households earning less than $250,000 a year – a category that covers more than 98 per cent of Americans...“Peter feels strongly that this is a pledge that has to be broken if the President is to take a lead on America’s fiscal crisis,”

    Cut spending doesn't appear to be in his vocab.
    Later, bye !

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