Rumors that Rahm Emanuel will be leaving the Obama Administration may be rumors, but it is now a fact that White House OMB Director, Peter Orszag, will be quitting. Orszag will be leaving the Administration quickly, within the next few weeks. He becomes the first key member of the Obama White House to resign. This comes as the Congress is completely stalled in drafting a budget resolution for 2011. Due back on April 15th, the Democrat leadership in the House appears to be in total chaos and unable to put a budget together. The reason being that it is expected to once again well surpass $1 Trillion dollars in deficit spending, despite PAYGO rules. Indeed, some stories floating about Washington are that the Democrats want to wait until after the November elections before submitting a budget bill.
Peter Orszag is the 37th head of the Office of Management and Budget. An economist and fellow from the Brookings Institute, Orszag co-wrote a paper in 2002 with Joseph Stiglitz, “Implications of the New Fannie Mae and Freddie Mac Risk-Based Capital Standard”. In a nutshell, the paper said that there was ZERO risk to the government (i.e. taxpayers) from a potential default of the two Government Sponsored Enterprises (GSE). Based on reality, I would have to say they were dead wrong!
In 2007, Democrats placed Orszag has head of the Congressional Budget Office (CBO). As director of the CBO, Orszag repeatedly drew attention to rising health care costs. One could say that the Obama-Democrat health care bill passed earlier this year was the end result of yet another miscalculation by Orszag. In 2008, Orszag penned an op-ed for the Washington Post calling for an aggressive Climate Change law to be passed which includes a cap and trade program to reduce carbon emissions.
Orszag, under pressure from the economic realities, did recently propose that all non-defense agencies reduce their budgets by 5% in the coming fiscal year. Given that under his eye, the Obama Administration and Democrats raised all such spending more than 20% in 2009, the sudden fiscal responsibility appears disingenuous. The 5% reduction request, along with the PAYGO rules, is part of the reason why the Democrat leadership in the House have yet to draft a budget for 2011. Under a 1974 statute, Congress must submit such a budget no later than April 15th. This has been violated before four times by GOP led Congress during their budget battles with the Clinton Administration, resulting in some cases government being shut down temporarily.
Peter Orszag, who recently married, will be leaving the Obama Administration next month. As Director of the Office of Management and Budget, he becomes the first cabinet-level member to quit. Given how nearly everything he says or thinks has been proven to be wrong, his sudden departure may be a blessing. Of course, now we’ll have to see who replaces him.