Reporting on Orszag Departure is Skin Deep

Peter Orszag’s decision to step down as the White House budget director didn’t get much press attention. The comings and goings of OMB chiefs is a particular bit of Washington wonkery and this installment had a hard time matching the drama of the McChrystal mess.

But the departure of a central player in the president’s economic team is a big deal, especially at this economic moment. Why is Orszag leaving? Does his exit mean anything for the country’s future economic course? The move prompts plenty of questions, but there are too few answers out there.

Bloomberg reported that Orszag thought about leaving back in April, but “stayed on after an appeal from the president.” Much coverage of the Orszag news noted that, if he was planning to go soon, then sooner was better. A new OMB director should be in place by fall, when the office is working on the budget proposal to be released in February. And yes, he’s getting married in September, after a much-publicized romance.

Before the news was confirmed, ABC’s Jake Tapper summed it up pretty simply:

The administration declined to comment, but Orszag was director of the Congressional Budget Office for two years before becoming OMB in January 2009. Eighteen months is approximately the median amount of time for the OMB director position, and Orszag is said to want to move on, having served in his position during the passage of the $862 billion stimulus bill and the nearly $1 trillion health care legislation.

Fine. But is there nothing else going on here? It’s a little hard to believe.

David Wessel, economics editor at the WSJ, provided a quick video analysis that seemed to make sense:

If Peter Orszag thought the president of the United States was going to spend the next two years embarked on an ambitious, once-in-a-lifetime correct-the-deficit-for-the-long-run program, he’d be sticking around. The fact that he’s leaving suggests it’s less likely that he thinks that’s going to happen and he’s going to go do something else.

Ahh. That’s interesting. Unfortunately, the story in the Journal didn’t do anything to fill out that line of thinking.

Instead, it put Orszag’s departure in the context of a debate within the Democratic party:

Mr. Orszag’s decision to resign as director of the Office of Management and Budget comes as the Obama administration—and the Democratic Party—begin to confront disagreements between those who believe near-term deficit reduction poses too much risk to the fragile economic recovery and those, such as Mr. Orszag, who say the deficit itself may be a more profound economic threat.

It’s true that Democratic leaders on Capitol Hill haven’t been able to deliver the help for local governments that the president wants. But the WSJ also points to a debate within the administration itself:

There is “a huge battle going on in the White House” between officials who want to focus on deficit reduction and those who want to be sure no steps are taken to further damage the economy, some with an eye on the November midterm elections, said Robert Reischauer, a former Congressional Budget Office director and head of the Urban Institute, a centrist think tank.

Oooh. Now we’re getting somewhere. Only then, there’s this:

White House officials say there are no divisions within the administration. The president and his team believe the top priority still has to be getting Americans back to work.

“There’s not a lot of controversy on the overall strategy: Return us to growth in the immediate term and confront the longer-run fiscal challenges facing the country,” said Austan Goolsbee, a member of the White House Council of Economic Advisers.

I’m not expecting the paper to get an on-the-record confirmation of a fundamental dispute over the president’s overall economic strategy. But it would be nice for readers to at least get a bit more background on who’s in what camp, and what they’re saying.

Journal readers just get a whiff of how Orszag may have been on one side, with that line about those “who say the deficit itself may be a more profound economic threat.”

The New York Times took a similar, and not quite sufficient, line:

In recent months, Mr. Orszag, 41, has espoused deficit reduction strategies in administration debates against those who pressed for more stimulus spending and tax cuts to keep the economy from slipping back into recession.

There’s a nice bit of reporting on all this from The New Republic’s Noam Scheiber, who points to something he wrote back in December about the rivalry between Orszag and Larry Summers, of the National Economic Council:

Last month, Orszag raised eyebrows when word leaked that he’d asked most cabinet agencies to prepare two budgets: one that freezes spending, the other that cuts it by 5 percent. Many congressional liberals were livid, and, according to multiple sources, Larry Summers’s National Economic Council reacted negatively to the emphasis on the deficit. (“The economic team has a healthy debate about most major issues,” says an administration official. “Getting people back to work is central to addressing the deficit. Similarly, putting the country back on a fiscally sustainable path is vital to confidence in the economy.”)

That’s more like it.

This week, Scheiber ends up concluding that, “while the debate over how to weight additional stimulus versus deficit reduction continues within the administration, these policy differences aren’t the reason Orszag is leaving.”

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.

So there is a debate at the White House. But it isn’t why he’s leaving. Fair enough.

All in all, I’d say readers need a bit more information to gauge what’s going on with this important job at this very important time.

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at