It generally doesn’t take too long for administration insiders to leak embarrassing details of White House feuds and policy disputes, so in that sense, Peter Orszag’s tell-all with New York Magazine is par for the course. The article mainly deals with the controversies Orszag himself stirred up with his departure from Barack Obama’s economic team, his departing apostasy on the Bush tax rates, and his greater apostasy by taking a prominent position on Wall Street with Citigroup. The most attention will focus on Orszag’s account of the infighting in the White House on economics and, er, chair position around the campfire:
Orszag’s comfort in his new job may have something to do with the relief he feels at being out of the White House. By last summer, Orszag’s relations with Rahm Emanuel and others had soured—badly. Depending on whose spin you believe, Orszag quit over principle, telling friends he was upset by Washington’s refusal to get serious about the deficit. A less favorable view is that Orszag was marginalized by Emanuel and David Axelrod. “He was accused of leaking and being disloyal,” said one Democrat close to the players. “The press loved Peter, which was part of the reason why the White House didn’t love him.” …
Orszag, who had run his own team at the Congressional Budget Office, didn’t always defer to Summers, and at one meeting, the pair reportedly fought over a chair across from Obama. “Peter was somebody who could be a foil to Larry. He suffered from a small case of Summers-itis, where you display your brilliance,” one budget-policy wonk who has worked with both men explains.
Orszag’s public profile, once one of his biggest assets, became a liability. In January, a “Page Six” headline blared, “White House Budget Director Ditched Pregnant Girlfriend for ABC News Gal.” The tabloid detailed how Orszag had split with his pregnant girlfriend, the Greek shipping heiress Claire Milonas, and taken up with the younger Golodryga. The baby drama was not well received by the no-drama Obama administration. Seven months later, Orszag was out. His departure did not end his problems with the White House.
Hey, after Monica Lewinksy, the pettiness of fighting over a chair ranks pretty low on the Scandal-o-Meter. If that’s the height of personal drama we get from this White House, that’s a big improvement over the last Democratic White House we had — and if you count Billy Carter and Miss Lillian, over the one previous to that, too. Orszag’s departure seems to have cleared the administration of most of its personal drama.
On policy, though, Orszag proved the wisdom of LBJ, who once said of J Edgar Hoover that “it’s probably better to have him inside the tent pissing out, than outside the tent pissing in.” Once out, Osrzag wasted no time in reversing the stream:
Orszag told Shipley [at The New York Times] that he wanted to write his debut column about the debate raging in Washington over whether to extend the Bush tax cuts. Congress was preparing to return from recess to vote on the issue. Obama was in full campaign mode, aggressively stumping to let the tax cuts for families earning more than $250,000 per year expire while upholding his signature campaign pledge of preserving the middle-class tax cuts. Orszag argued that Obama should accept a temporary extension of all the Bush tax cuts, then let all of them expire in 2013, including those to the middle class. Orszag’s plan made a certain amount of economic sense from a deficit-hawk perspective—keep the money pumping through the system at the depths of the recession, and then, when things got better, focus like a laser on the deficit. But Obama’s political advisers, as well as Summers, thought it politically daft, seeing as Obama had promised to make the middle-class tax cuts permanent, and also suspected that the Republicans would renege on any such deal about the tax cuts, leaving the Obamans with nothing for their concession. Orszag now says his views on taxes and the deficit were one of the factors that made him decide to leave. “I didn’t think I could be an effective advocate for the administration on making the tax cuts permanent, and I didn’t want to be in office when that happened,” he told me.
The column appeared on September 7th of last year, not exactly perfect timing for a White House that was already facing a disastrous midterm election. Democrats had hoped to avoid the debate altogether before the election, and then take it up in the lame-duck session of Congress, which is what happened in the end. Orszag’s op-ed forced the White House and Democrats in Congress to respond, and as New York Magazine accurately recalls, they weren’t happy about it at all:
Not surprisingly, the White House was outraged by the op-ed’s timing and content. Orszag’s column provided powerful ammunition to Republicans who were winning with the argument that repealing the Bush tax cuts during the flagging recovery would be bad news. The press seized on the op-ed as evidence that Obama’s brain trust was split on the issue.
Nor was that the last time Orszag embarrassed the administration. Obama had campaigned on cutting the link between Wall Street and administration officials in order to demonstrate independence and a sense of counterweight to Big Business and Big Finance. Shortly after the column, Orszag took his position at Citibank — not just an obvious member of both Bigs but also a recipient of TARP financing. The article makes no bones about why Citi CEO Vikram Pandit wanted Orszag; he wanted Orszag’s connections, the very problem that Obama and his team flogged in the 2008 election and after the collapse.
Every President has a few gossipy high-ranking advisers who offer a few moments of embarrassment for the administration; for George W. Bush, it was Treasury Secretary Paul O’Neill, whose sniping was decidedly more personal than Orszag’s. If this is as bad as it gets for Obama, he can count himself lucky. But if the economy doesn’t improve, more advisers will start heading for the door, and Orszag’s criticisms might end up being the high point. Moral of the story: when a prospective appointee says he doesn’t want the job, believe him.