With less than a month to go before President Obama is required by law to submit a budget to Congress (February 6th), Mr. Obama’s decision today to make Jack Lew White House chief of staff leaves deputy director of the Office of Management and Budget (OMB) Heather Higginbottom to take Mr. Lew’s place as the director of OMB.

As The Hill newspaper reports, Ms. Higginbottom has only served one month in her present role as deputy director of OMB and is considered a “controversial appointee” due to her thin–some would say “nonexistent”–budgetary resume.  Prior to becoming deputy director of OMB, Ms. Higginbottom was a deputy policy adviser to President Obama and worked on his campaign as a policy director.

But it was Ms. Higginbottom’s lackluster performance during a March Senate Budget Committee hearing that raised Republican concerns about whether Ms. Higginbottom was even qualified to serve as deputy director of OMB.

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President Obama’s decision today to replace White House chief of staff William Daley with the director of the Office of Management and Budget Jack Lew is raising eyebrows on Capitol Hill as Washington watchers recall Mr. Lew’s past statements.

On Feb. 13, 2011, Mr. Lew appeared on CNN’s State of the Union with Candy Crowley and said of Mr. Obama’s proposed budget:

Our budget will get us, over the next several years, to the point where we can look the American people in the eye and say we’re not adding to the debt anymore; we’re spending money that we have each year, and then we can work on bringing down our national debt.

Mr. Lew’s statement was deemed “false” by the nonpartisan, Pulitzer Prize-winning PolitiFact.com.

“The contention that ‘we will not be adding more to the national debt’ after the middle of the decade seems incorrect on its face,” reported PolitiFact.  “So what is the administration thinking?”

On interest payments alone, Mr. Obama’s budget would have accrued $884 billion, and in the end, Mr. Obama’s budget was considered so misguided that it was unanimously rejected by the U.S. Senate in a 97-0 vote.

Still, Mr. Lew’s false statement did not escape scrutiny and came under intense fire when he received the following grilling at the hands of Sen. Jeff Sessions (R-AL):

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January 23, 2013

White House, Cabinet Room

First meeting of President Obama’s new team

OBAMA: Listen up, people. I got myself across the finish line but couldn’t bring Congress along.  That’s why you’re here.  Except for Defense, you represent the first entirely recessed Cabinet in American history.  Do me proud.  Michelle?

MICHELLE: I’m the new Chief of Staff. You want to see him, you gotta get past me. Waste my time, I’ll cut your budget 10%.

OBAMA: So, let’s hear some fresh ideas.  HHS?

MICHAEL MOORE: Now that the World Court has overturned the Supremes and ruled the PPACA [ObamaCare] constitutional, sir, amend the program to cover all humanity.  Eventually, include lesser beings, as well.  Innumerable uninsured creatures are suffering out there.

OBAMA: Easy, big guy; we’ll do it in stages.  After people, we insure the remaining mammalians; then, things with legs; finally, air breathers.  Treasury?

PAUL KRUGMAN: I’ve run the numbers, sir: Stimulus IV should tip the worldwide economy into depression within a year.

OBAMA: Good.  That gets us closer to the one-world government mankind will demand I lead to left the—I mean, to right the ship.  I’m getting bored with the Presidency, anyway. OMB? (more…)

In the pitched battle over whether government should take over our health care system, a group of pro-life Democrat congressmen held the line to oppose the legislation because they knew the bill authorized funding for abortion.  Under intense pressure from the president and their pro-choice comrades in the Congress, the group, led by Rep. Bart Stupak (D-MI) flip-flopped when they received a letter from the president ensuring that government would not spend money for abortion.  They were had.

Now Sen. Rob Portman appears ready to “pull a Stupak.”  Under pressure from Democrat Sen. Sherrod Brown, Portman appears ready to cut a deal to confirm former Ohio Attorney General Richard Cordray to a five-year term to head the super-regulatory agency known as the Consumer Financial Protection Bureau (CFPB).

Word on Capitol Hill is that Portman has assured Cordray he has no problems with his nomination and is asking for assurances that his concerns about the Bureau will be address – not in legislation, but in a letter.  Has Portman learned anything from the Stupak incident?  Apparently not.

Unlike Portman, Sen. Richard Shelby (R-AL) is taking a principled stand against the creation of a new super regulatory agency and is not shaking in his boots.  Shelby has organized his colleagues who have pledged to oppose the nomination of Cordray or any other nominee unless the Bureau is reformed.  Unlike Portman, apparently, Shelby is smart enough to demand real statutory changes as opposed to “promised” changes.

The CFPB was structured in a way to give huge, and perhaps unconstitutional, power to its Director.  Alan Raul, who served as general counsel of the Office of Management and Budget and associate counsel to President Ronald Reagan, described the CFPB’s power as “an independent agency on steroids because Congress essentially exempted the director from any meaningful accountability or strong presidential oversight.”

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Emails released late Thursday night show that officials in the White House were privately very concerned over the viability of Solyndra even as they publicly declared the solar panel manufacturer was in good shape.

“The optics of a Solyndra default will be bad,” an official from the Office of Management and Budget wrote in a Jan. 31 email to a senior OMB official. “The timing will likely coincide with the 2012 campaign season heating up.”

One would hope that an official in OMB would be more concerned that the federal government had just wasted $535 million on the now-bankrupt “green jobs” company, but instead the e-mails reveal ongoing discussions over the political aspects of the doomed venture.  Additional e-mails show that as early as May 2010, right before President Obama’s famous photo-op at the Solyndra headquarters, White House officials were ignoring and downplaying industry reports that Solyndra was in trouble.

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Under normal circumstances, when a process is found to be corrupt, any outcome or recommendation from that chain of events is either cancelled or put on hold until the full extent of the corruption can be uncovered. Essentially, good practice dictates that you start from scratch, to ensure that there is no undue influence.

But that’s not how the Obama Administration works when the final outcome is something they want. Displaying the “Damn the torpedoes, full speed ahead” attitude they’ve come to be known for on everything from health care and spending to cap & trade and net neutrality, the Obama administration is on the verge of adopting rules governing for-profit educational institutions, even though they have emerged from a wholly corrupt process that, to paraphrase Senator Tom Coburn (R-OK), may end up with people going to prison.

It all started last summer when Senator Tom Harkin (D-IA), chairman of the Health, Education, Labor and Pensions (HELP) Committee, held a hearing on whether or not students attending for-profit colleges should be allowed to receive federal financial aid. Harkin strongly supports a proposed Department of Education (DoE) rule, known as Gainful Employment, which would severely damage those institutions and kill higher education opportunities for thousands of Americans.

It was odd that one of the witnesses Senator Harkin chose as an “expert” on for-profit colleges had no expertise in the industry whatsoever. Steve Eisman is a Wall Street short-seller with no background or expertise on education policy. But with the stock prices of private-sector colleges and the companies that run them risking collapse, he does have a lot to gain by ensuring that happens.

This was just the first of what would be many curious developments in the Progressives’ crusade against for-profit education.

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As readers of Big Government know, an impasse over a few billion dollars in proposed spending cuts threatens to shutdown the federal government. (And, by a few billion dollars I mean, rounding error.) As regular readers should also know, I’ve come to embrace a shutdown, rather than fear it.

As this recent Congressional Research Service report explains, if the government were to shutdown, an OMB Directive issued in the 1980s (along with a handful of legal opinions) guide what parts of government continue to function and what parts must close down.  Short story, all of the important functions of government, i.e national security, the military, air traffic control, border security, Social Security payments, etc., will continue to function. The parts that have to shut down…well, lets just say they are candidates for permanent cuts. I mean, if the country functions for several weeks without a few hundred thousand ‘non-essential’ employees, couldn’t we probably function without them forever? I’m not saying every one of these jobs should necessarily be eliminated…but it isn’t a good place to start?

Sensing the potential PR nightmare from this, it seems the Obama Administration may have decided to raise the stakes on a shutdown. According to draft guidance from the Pentagon, the Obama Administration will require military personnel to report to work…but, will hold their paychecks until the impasse is resolved. As Government Executive explained in a March 15th article:

Military personnel and exempt Defense Department civilian employees are required to continue working without pay during a government shutdown, according to guidance from the Office of the Secretary of Defense.

In a memo prepared earlier this month, Defense officials noted that service members and some civilian workers, including those involved in national security and the protection of life and property, still must report for duty but will not be paid until Congress appropriates funds to reimburse them for that period of service. All other employees will be furloughed, the memo stated.

Military personnel are not subject to furlough.

This is new.

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Earlier this season, Team Obama launched a PR offensive designed to convince Americans that a real economic recovery was underway. They called it ”Recovery Summer!” Note the exclamation point. They wanted you to really, really get that they believed we were in “recovery.” It wasn’t just a ”recovery.” It was “Recovery Summer!”

We should have known it was all illusory quackery when they wheeled out Joe Biden to talk it up.

Today we learn that the “recovering” economy shed 131,000 jobs last month, the second straight month of falling employment. More and more temporary census jobs ended, and the private sector added a paltry 71,000 jobs, far fewer than most expected. In more bad news, the government revised payrolls for May and June to show 97,000 FEWER jobs than originally reported.

All of the arrows are down.

For the $1 trillion-plus that the Democrats have spent trying to “create jobs” and “stimulate the economy,” this is where we are: job losses, not job creation; a formal 9.5% unemployment rate with the real unemployment rate at 18%; stagnant growth; and an exploding deficit and national debt.

Heckuva job, Obama, Pelosi, and Reid.

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Office of Management and Budget Director, Peter Orszag is one of the first major players of the Obama administration to call it quits.  Orszag was touted as one of the most brilliant minds in number-crunching, especially by Ezra Klein, who deemed Orszag as the most influencial bureaucrat:

In the coming years, no bureaucrat will be as decisive as Peter Orszag — the former director of the Congressional Budget Office who is now the head of Barack Obama’s Office of Management and Budget — and few bureaucracies will be as important as the CBO and the OMB. For every major policy and legislative fight, those organizations will decide the Number: the official price tag of a government program. And you can’t do anything without the Number.

But while everyone was so enamoured with the heartbreaker, stud, and hottie Orszag and his economic brilliance and wisdom to sound alarms of repeated financial unsustainability as the CBO director, what did the USA really get?  Patterico has a quick outline on Orszag which touches on some key points, but with Orszag’s background, people should wonder how he ever got to hold the keys to the budget.

If you look a bit closer at his education, background, and experience, Orszag was everything that the Keynesians/progressives/Democrats could have dreamed of in a budget director.  Let’s explore.  Aside from being the former CBO director, Orszag  was a senior fellow and Deputy Director of Economic Studies at the Brookings Institution, where he directed The Hamilton Project. His education is impressive having studied and receiving two degrees from the London School of Economics (LSE). While all Orszag’s education and experience appears impressive, it should have been more alarming than comforting to Americans.

Orszag’s policies are heavily influenced by his days at the LSE, and Obama has placed others from the LSE in his administration. As prestigous as the LSE may be, it is concerning because of the school’s founding and history, and continual ideological path it has taken since its inception. But how does all of this translate into effective economic policy specific to the capitalistic US economy? It doesn’t.  Although it may not have been apparent, but Orszag’s ideology shaped the US economic policy into exactly what the Obama administration had planned.

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That’s because when the entire country is hurting and the private sector continues to lose jobs, bureaucrats are being hired.

The following chart makes that case. Since the beginning of the recession (roughly January 2008), some 7.9 million jobs were lost in the private sector while 590,000 jobs were gained in the public one.  And since the passage of the stimulus bill (February 2009), over 2.6 million private jobs were lost, but the government workforce grew by 400,000.

Plus, as you know, according to the latest numbers from Bureau of Economic Analysis, the average federal civilian worker now earns double what private-sector workers earn when factoring in wages and benefits ($119,982 vs. $59,909). And the gap is increasing.  According to Chris Edwards of the Cato Institute, in 2000, the average federal worker earned 66 percent more in total compensation than the average private-sector worker. By 2008, that ratio had risen to 100 percent. That’s serious money.

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An unlikely power figure has emerged in the Obama Administration. He’s not a great orator, nor trendy, nor well-known.  But, if the ability to influence national leaders, shape a national agenda and influence public opinion are indicators, then, Peter Orszag, the Director of the Office of Management and Budget (OMB), is, arguably, the most powerful and,  potentially, most dangerous, man in Washington, DC.

As Director of OMB, Peter Orszag is the arbiter of all financial information shared with Congress.  A series of little-known, OMB “circulars”, such as A-11, have established the rules, and repercussions if violated, by which Executive branch agencies communicate with Congress, especially regarding budgets, funding and agency priorities.

OMB, the President’s gatekeeper for budget matters, executes a complicated juggling act, balancing Obama Administration priorities and budgetary spin, against agency needs.   Frequently, to secure a critical vote, an elected member may be rewarded with a pork project for the folks back home, and, often, it’s the OMB director that has to figure out how to avoid the appearance of a bald-faced bribe, while manipulating CBO scoring on infrastructure projects.  Orszag, as the former head of CBO, understands exactly how this game is played.  Thus, most of the project and budget information that Congress reviews have been shaped by OMB’s preferences.

Peter Orszag controls much of the content and quantity of the data flow to Congress, to the President and to American citizens.  Orszag has oversight over most of the federal government’s critical data reporting structures.  Apart from the ineffective and error-prone Stimulus reporting sites (data.gov, recovery.gov),, OMB oversees federal contract opportunities and federal grants.

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Wednesday, the Washington Post reported: “For months, economists and government watchdogs have warned that the job-creation reports should be taken with a heavy grain of salt. . . . Trying to count the number of jobs created or saved may have been a fool’s errand that needlessly undermined the credibility of the overall reporting effort.”

No kidding. Now, the AP reports that the White House

has abandoned its controversial method of counting jobs under President Barack Obama’s economic stimulus, making it impossible to track the number of jobs saved or created with the $787 billion in recovery money. Despite mounting a vigorous defense of its earlier count of more than 640,000 jobs credited to the stimulus, even after numerous errors were identified, the Obama administration now is making it easier to give the stimulus credit for hiring. It’s no longer about counting a job as saved or created; now it’s a matter of counting jobs funded by the stimulus.

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President Obama, in his speech on the economy, given at the Bookings Institute, once again, tried to be all things to all people.  Most of the speech was aimed at the dwindling number of devotees who were anxious to hear that additional taxpayer revenues would continue to flow to favored, pet projects.

Nor were these fans disappointed, for, despite running $1.2 trillion in annual deficits, President Obama has once again promised to borrow from the future to fund yet another round of pork and dodgy projects disguised as infrastructure and green investments.

At the same time the President was busy adding more spending programs to our bloated budget, he insisted, once again, that he was committed to fiscal discipline.  Obama said “We’ve combed the budget, cutting waste and excess wherever we could.”  Really?

What programs have been cut and what sorts of excess were eliminated?  For the curious….here goes.  After several months, Obama’s OMB has released a list of the top four programs that have been identified after an exhaustive search and combing of the federal budget.

The Administration reviewed over 38,000 different ideas, to aggressively root out wasteful practices, many of them submitted by government employees.   After much work, synthesis,and review, OMB announced the four cost-cutting idea finalists:

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The first game in a long series of Obamacare battles is complete and the liberals lost Game 1 by 13 votes.  The Senate voted against a procedural motion to debate the so-called “Doc Fix” bill Wednesday.  Just as Manny Ramirez of the Los Angeles Dodgers has taken a beating in the media for leaving Game 5 of the National League Championship Series early to take a shower and hitting a mere .250 for the series, Senator Harry Reid has taken a beating in the press for marching the Democrat Caucus into a losing vote in the first battle over Obamacare.

A bipartisan coalition of senators concerned about spending stopped Senators Reid from bringing “Doc Fix” to a vote with 13 Democrats siding with the entire Republican Caucus.  Democrat Senators Evan Bayh of Indiana, Robert Byrd of West Virginia, Kent Conrad and Byron Dorgan of North Dakota, Russ Feingold and Herb Kohl of Wisconsin, Claire McCaskill of Missouri, Bill Nelson of Florida, Jon Tester of Montana, Mark Warner and Jim Webb of Virgina, Ron Wyden of Oregon and Independent Democrat Senator Joe Lieberman of Connecticut all opposed the motion to start debate on the bill.

The strategy to pass the “Doc Fix” outside of Obamacare in an attempt to buy off doctors groups’ support for Obamacare was documented in the media.  The Hill reported earlier this week that “the White House and Democratic leaders are offering doctors a deal:  They’ll freeze cuts in Medicare payments to doctors in exchange for doctors’ support of healthcare reform.”  Clearly the majority of senators would not go along with this strategy because the $247 billion price tag for the bill was too high to buy Obamacare. 

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