Obama on Treasury Nominee: 'Jack Has My Complete Trust'
President Barack Obama nominated White House chief of staff Jack Lew to be secretary of the Treasury on Thursday, declaring his complete trust in an aide with three decades of Washington experience in economic policy and a penchant for shunning the limelight.
"He is a low-key guy who prefers to surround himself with policy experts rather than television cameras," Obama said.
(Read More: What Obama Is Saying by Tapping Lew for Treasury)
Obama announced his nomination in the ornate White House East Room, flanked by Lew and outgoing Treasury Secretary Timothy Geithner. The two men and their backgrounds illustrate the nation's changing economic landscape -- Geithner a long time banking specialist with the Treasury and the Federal Reserve who took office in 2009 at the height of the nation's financial crisis; and Lew the budget expert as the government struggles with its debt and deficit challenges.
Obama heaped praise on Geithner for addressing the Wall Street meltdown and shepherding an overhaul of financial regulations through Congress.
"When the history books are written, Tim Geithner is going to go down as one of our finest secretaries of Treasury," Obama said. "I can't think of a better person to succeed Tim than Jack Lew."
Geithner will stay on until Jan. 25, a Treasury official told CNBC.
Lew would take the helm of the government's main agency for economic and fiscal policy just as the administration girds itself for a new confrontation with congressional Republicans over the nation's debt and deficits.
A year ago, almost to the day, Obama appointed Lew as his chief of staff, taking him from his perch as director of the Office of Management and Budget into the White House's tight inner circle.
"I trust his judgment, I value his friendship," Obama said. "Jack has my complete trust."
In selecting Lew to replace Geithner, Obama is not only picking an insider steeped in budget matters but also a tough bargainer. Some Republicans complain that Lew has been unyielding in past fiscal negotiations.
(Read More: Lew and the Independence Question: Op-Ed)Lew would assume the post in time for the administration to tangle anew with Republicans over a confluence of three looming fiscal deadlines -- raising the $16.4 trillion federal borrowing limit, averting automatic spending cuts to defense and domestic programs, and renewing a congressional resolution that has been keeping the government operating. Those three events, if unresolved, would have a far greater negative effect on the economy than the "fiscal cliff" Obama and Congress avoided a week ago.
Lew, 57, has often been described as a "pragmatic liberal" who understands what it takes to make a deal even as he stands by his ideological views. However, a senior White House official told CNBC that Lew is a fiscal conservative who will work well with the GOP and help persuade liberal Democrats on what has to be done.
"He's a political guy. He didn't get where he is today by being a shrinking violet," said Paul Light, a public policy professor at New York University and an acquaintance of Lew's. "But he's really a doer. He's the kind of guy you want at the table if you want to get something done."
One senior Republican senator, Alabama's Jeff Sessions, voiced opposition to Lew. Though Lew may face a tough confirmation in the Senate, he's not likely to encounter the type of stiff opposition that is already mounting against former Sen. Chuck Hagel, a Nebraska Republican whom Obama has tapped this week to be his defense secretary.
"We need a secretary of Treasury that the American people, the Congress and the world will know is up to the task of getting America on the path to prosperity, not the path to decline," said Sessions, the top Republican on the Senate Budget Committee. "Jack Lew is not that man."
White House press secretary Jay Carney praised Lew during Wednesday's press briefing. "Over the past more than quarter of a century, Jack Lew has been an integral part of some of the most important budgetary, financial and fiscal agreements, bipartisan agreements in Washington," Carney said.
Once confirmed, Lew's indistinguishable looping signature will go on the nation's currency.
"I've never noticed Jack's signature, and when this was highlighted yesterday in the press, I considered rescinding my offer to appoint him," Obama said. "Jack assures me that he is going to work to make at least one letter legible in order not to debase our currency."
Lew's nomination is the fourth major personnel change in the administration since Obama's re-election. Obama tapped Sen. John Kerry, D-Mass., for the State Department, Hagel to lead the Pentagon and White House counter terrorism adviser John Brennan for the CIA's top job.
One prominent woman in Obama's Cabinet, Labor Secretary Hilda Solis, resigned her post Wednesday. No successor has been named.
Lew was a top aide in the 1980s to House Speaker Tip O'Neill, a Massachusetts Democrat, playing a role in the Social Security deal between the speaker and President Ronald Reagan in 1983.
Before becoming Obama's chief of staff, Lew was director of the Office of Management and Budget, a post he also held back in the Clinton administration, serving from 1998 to early 2001. While running OMB during the Clinton administration, Lew helped negotiate a balanced budget agreement with Congress, something that has eluded Washington ever since.
When Obama named him chief of staff one year ago, the president praised him as the "only budget director in history to preside over budget surpluses for three consecutive years."
"His resume is tailor-made for what is most important right now," said Diane Swonk, chief economist at Mesirow Financial in Chicago. On Wall Street, Lew was managing director and chief operating officer of Citi Global Wealth Management and then Citi Alternative Investments. At the start of the Obama administration, he oversaw international economic issues at the State Department.
Despite his stint on Wall Street, Lew doesn't have the type of financial experience that Geithner brought to the job at the height of the financial crisis in 2009. Indeed, there's not as much of a premium on those skills now as the nation's attention has turned from bank bailouts to fiscal confrontations and brinkmanship.
Still, Lew will have to address other significant challenges, including completing implementation of the financial regulatory overhaul of 2010.
Lew will probably play a key role in deciding the fate of government-controlled Fannie Mae and Freddie Mac, the federal housing agencies partly blamed for the collapse of the housing market.
Internationally, he will also be the administration's point man on issues related to China's integration into the global economy and Europe's sovereign debt and financial struggles.
For all that, Lew faces a better landscape than Geithner did when he stepped into the post at the start of Obama's first term.
"The basic financial position and economic position of the country is much stronger today that it was four years ago," said Michael Barr, who was assistant Treasury secretary for financial institutions in 2009 and 2010. "That's a significant advantage for a Treasury secretary coming in."
CNBC's Steve Liesman and Larry Kudlow contributed to this story.