Administration Officials Plead With Landrieu To Drop Hold On OMB Nominee Jack Lew

September 29, 2010 4:47 a.m.

Democratic Sen. Mary Landrieu is holding up President Obama’s key economic appointee in critical fiscal times over a local issue his economic team has no control over, giving Republicans campaign ammunition and throwing a wrench into budget planning just as the Senate is set to go home for the elections.

Secretary of the Interior Ken Salazar and other top administration officials have been pleading with Landrieu (D-LA) to release her hold on the nomination of Jack Lew to be President Obama’s new Office of Management and Budget director. But Landrieu says she won’t budge until the moratorium on Gulf Coast drilling is lifted.

OMB doesn’t have jurisdiction over drilling, and Democrats are privately outraged someone from their own party would block such a critical nomination — with several suggesting the state of gridlock in the Senate has reached an untenable level. What’s more, the delay to install Lew creates big budgetary problems just as the administration is prepping for several major initiatives, including the 2012 spending blueprint.It also gives Landrieu’s fellow Louisiana Sen. David Vitter, a Republican up for reelection this fall, something to campaign on. He joined her complaint last week.

What’s more, Landrieu took a jab at Obama, telling Politico Tuesday that the president’s policies “are doing much more harm than the [BP] spill itself to the economy of the South coast.” Fuming Democrats were shocked by her remarks to Politico, which reported Landrieu said the OMB hold is “the only way” she has to get the Obama administration’s attention.

On Tuesday Salazar and Bureau of Ocean Energy Management Director Michael Bromwich tried to make their case in person to Landrieu during a private meeting.

Salazar asked Landrieu, his former colleague, to try and strike a compromise. An Interior officials tells TPM that Salazar told Landrieu that he understands her worries but that “he will make decisions on the temporary deepwater drilling suspensions based on the progress of the reforms we are implementing and the recommendations of Director Bromwich.”

The official said Bromwich updated Landrieu on the progress of permitting and said his agency would not “be cutting corners or rubber stamping anything. Oil and gas companies need to meet the new standards for safety and environmental compliance if they are going to be allowed to develop in U.S. waters.”

Obama nominated Lew to replace Peter Orszag on July 13. He sailed through committee with a 22-1 vote last month. But right after Lew seemed headed for a speedy confirmation on the Senate floor, Landrieu announced the moratorium on drilling was causing her state economic harm. She said that even though she had no personal objections to Lew, she would block his nomination.

“Although Mr. Lew clearly possesses the expertise necessary to serve as one of the president’s most important economic advisors, I found that he lacked sufficient concern for the host of economic challenges confronting the Gulf Coast,” Landrieu told Senate Majority Leader Harry Reid in a letter last week. She said she wouldn’t budge “until I am convinced that the President and his Administration understand the detrimental impacts that the actual and de facto moratoria continue to have on the Gulf Coast.”

A White House official left open the possibility of Obama or Vice President Biden making another appeal to Landrieu. Her office said that hasn’t happened as of yet.

An OMB spokesman said the administration is trying to work it out with Landrieu in hopes of getting something done this week before the Senate goes home for the midterm elections.

“We want to get this done,” the official said.

OMB is short a director at what Lew identified in his testimony as the most critical time in American fiscal policy “in a generation.” Officials said in addition to prepping next year’s budget, and preparing for Congress’ continuing resolution on this year’s budget, the fiscal commission is getting ready to recommend major changes to entitlement programs.

OMB also is prepping to implement Obama’s 3-year non-security, discretionary spending freeze — no small feat. Add in the election as a backdrop, and being leaderless is a huge problem. This was already a hard budget year to be without a director, and with election looming, the timing couldn’t be worse, officials argue.

Once the dust settles on the midterm elections, the national conversation is going to be dominated with decisions on government spending, tax cuts and deficit reduction, the official said. Lew, who worked with Alan Greenspan in 1983 and worked on the 1996 and 1997 budgets, is the right person for the job. Officials fret they’ve already lost crucial weeks of work on the budget, since Lew can’t participate until he’s confirmed.

OMB Watch, which is hardly known as friendly to the department, points out that it’s shocking a Democrat would block her own president’s nominee during such tough economic times. The blog points out that 10 Republican senators backed Lew and only Sen. Bernie Sanders (I-VT) voted no in committee — fairly good numbers given the political climate.

The knee-jerk response to the problem is pushing Obama to do a recess appointment, but even that isn’t easy. Nominees don’t like it, for starters, because it colors their reputation and might make it harder for them to work with the Senate down the line.

Landrieu complained to reporters Tuesday about “pushback” from the White House, but called it a “respectful” argument.

“We are making slight progress, but not enough for me to change my position at this time,” Landrieu said, according to The Hill.

Senate Majority Whip Sen. Dick Durbin (D-IL) told reporters he is “more optimistic that Senator Landrieu will be able to move our way,” adding, “We’re working on it.”

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