The End Of Orszagmania Is Nigh

Heather Horn at The Atlantic with the round-up

Obama budget director Peter Orszag–he of the power engagement, love child, and famously baffling sex appeal–is resigning. Set to leave in July, according to The New York Times, he would be “the first official to leave the Obama cabinet.” Here’s the roundup of regulars on what that means:

Why Now? Because It’s Time “Eighteen months is approximately the median amount of time for the OMB director position,” notes ABC’s Jake Tapper. Furthermore, “Orszag was director of the Congressional Budget Office for two years before becoming OMB in January 2009.”

Noam Scheiber at TNR:

If nothing else, the press reports stress that Obama wanted Orszag to stick around, something I’ve heard independently. To the extent that members of the economic team hold somewhat different policy views, I get the impression the president likes it that way, as the administration official quoted above suggests.

As I understand it, the reason Orszag has decided to step aside now is that the upside to sticking around just wasn’t that great after he’d successfully overseen two budget cycles and helped manage a once-in-a-generation healthcare reform effort. (To say nothing of that stimulus bill…) What you have to understand about Orszag is that he’s an extremely bright guy who’s excited by intellectual, as opposed to, say, managerial, challenges. What you have to understand about being OMB director is that it’s an incredibly taxing job—there’s a huge amount of work that has to get done in a short period of time, year in and year out. Put that together and what you had was a grueling job that Orszag found pretty exhilarating when the learning curve was steep, and which became a little less exhilarating but no less grueling once the learning curve flattened out. Between that dynamic and his impending wedding in September, which roughly coincides with the start of the new budget season, it makes perfect sense for him to hang his slide rule elsewhere.

Update: I shouldn’t minimize the role of Orszag’s upcoming marriage. He is known to be very devoted to his fiancee, which makes the decision not to sign on for another grueling year all the more understandable.

Alan Mascarenhas at Newsweek:

While Orszag is not exactly a household name, he is something of a celebrity inside the D.C. Beltway (and, among other things, surely the first ever OMB chief to inspire his own fan site; evocatively titled Orszagasm with the tagline “Putting the OMG back into the OMB”). Rumors of his departure—which would represent the first from President Obama’s cabinet—have been building for some time. He is getting married in September and is reportedly keen to leave enough time for his successor to organize President Obama’s next budget in February.

Orszag’s office has not publicly confirmed the reports. “Peter’s focused on his work, not on Washington speculation,” said his spokesman, Kenneth Baer.

Christopher Beam at Slate:

Peter Orszag became famous for making health care cost control sexy. His replacement will have an even harder task: Doing the same for deficit reduction.

Reducing the deficit is the Washington equivalent of eating one’s vegetables. It’s preached mainly by stern fogies, who don’t make it sound very appetizing. Whoever replaces Orszag as director of the Office of Management and Budget—the top names floated so far are Clinton administration vets Laura Tyson and Gene Sperling—will have to change that.

Derek Thompson at The Atlantic:

The two pillars of Orszag’s legacy are the massive $800 billion stimulus bill passed in early 2009 and the health care reform bill passed about a year later. It’s fair to say that both bills were policy successes and popular failures. The Recovery Act was the macroeconomic equivalent of throwing everything but the kitchen sink at the recession. It included hundreds of billions of dollars in tax cuts for working families, extended unemployment benefits, unburdened the states of massive Medicaid and education responsibilities, and seeded infrastructure projects across the country.

The Recovery Act might have stimulated the economy — or at least built a floor to the downturn — but it did not stimulate much gratefulness. Poll after poll in the last year and a half demonstrates consistent pessimism that the stimulus did much to create jobs. This is easily explained: the administration said that unemployment wouldn’t rise above 9 percent after the bill passed. Instead it rose above 10 percent since the recession was deeper than predicted. That looks like failure, even if it’s relative success.

Orszag’s second achievement is another kitchen-sink bill and another liberal policy success that failed to inspire public approval. Health care reform created a new entitlement for tens of millions of uninsured Americans, planned cuts to Medicare and threw a smorgasbord of missiles at the real long-term monster of medical inflation, including: comparative effectiveness research, a Medicare advisory counsel, an innovation center and more cost-cutting experiments. But once again, folks aren’t applauding. In a June Gallup poll, 50 percent of respondents said they wanted health care partially or completely repealed.

James Pethokoukis:

But there is little doubt Orszag will depart as the most consequential Office of Management and Budget director since the notorious David Stockman nearly torpedoed Reaganomics in the early 1980s by calling supply-side economics a sham. In hindsight, of course, Reaganomics looks pretty good, including 17 million net new jobs and a collapse in inflation.

But Orszag was no whistle-blower of some perceived fiscal sleight-of-hand. Instead, it was just the opposite. He was a facilitator and enabler, providing the intellectual firepower and energy behind Obama’s drive for healthcare reform. Orszag made the case to the president that reducing healthcare costs was an important element to slashing the long-term budget deficit. More importantly, he persuaded Obama the U.S. healthcare system was so inefficient, overall spending could be restrained while also providing near-universal health insurance coverage. In effect, “bending the curve” was a free lunch. Or at least close enough for government work.

It was an audacious claim, mostly based on a single controversial academic study. Republicans never bought into the theory, and neither did Orszag’s successor at the Congressional Budget Office, Uncle Sam’s fiscal scorekeeper. In the end, Obama was forced to cut future Medicare spending and raise taxes to make the numbers balance out — at least on paper. Few Washington observers think those cuts will happen, meaning that the budget deficit could explode if Orszag’s novel theories don’t pan out. And even if the cuts occur, many budget hawks were counting on them to make Medicare sustainable over the long-term, not create a new entitlement.

Too bad Orszag didn’t use his considerable political skills – Larry Summers was supposedly warned to be careful of the guy “wearing the cowboy boots and bad toupee” – to make the case for entitlement reform first. In that regard, Orszag’s legacy is uncertain at best.


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