With trillion-dollar deficits, OMB director is an impossible job in a left-wing administration. The president would be telling him, “Peter, you have to reduce the deficit so that I’m perceived as being fiscally responsible.”
But then presumably every single substantial cut Peter suggested would be vetoed by the president or his inner circle because they believe in government programs.
So what does Peter do? The same thing Bush OMB directors did — use smoke and mirrors to make it look like the deficit is falling without having to cut anything. For example, only account for one year of war costs, AMT fix, doc fix, etc.
All that said, despite his reputation, my sense is that Orszag is quite left-wing.
Does Obama now choose another leftie like Bob Greenstein or more of a centrist like Laura Tyson?
One thing to watch will be the new OMB nominee’s views on VAT. That is the giant budget battle ahead.
– Chris Edwards is the director of tax-policy studies at the Cato Institute.