The unexpected departure of Bill Daley as Barack Obama’s chief of staff and replacement by Jacob Lew, director of the Office of Management and Budget, is a setback for economic policy going into a critical period. But it also presents the president with an opportunity to improve his case for re-election.
Mr Daley, scion of a famous political family from Chicago, generally got low marks as chief of staff since taking over the position last January. Liberals often complained that the former Commerce Department secretary was too close to the business community and inattentive to the concerns of Democrats in Congress.
Nevertheless, it is not good for any president to have to deal with such an important change going into a tough election year. The White House chief of staff must juggle the president’s political needs on the campaign trail and those of the cabinet as well. He must also keep the ship of state on course while the president’s attention is necessarily heavily focused on campaign strategy. And the chief of staff is often the principal liaison with the Democratic National Committee and other senior political officials.
Moreover, the White House itself is a large organisation that requires a significant amount of nuts-and-bolts managerial attention. (I worked there during the last two years of Ronald Reagan’s presidency.) In short, the chief of staff is sort of an executive director for the entire government. Any change in the position is unsettling.
Mr Lew will have no difficulty filling Mr Daley’s shoes. He has significant government experience both at OMB and the State Department, where he was the number two official from 2009 to 2010. However, his departure leaves the OMB, which has primary responsibility for drafting and implementing the federal budget, without a leader at a time when budget issues are unusually sensitive, both economically and politically.
Democratic partisans will question whether Mr Lew, who is known principally as a technocrat, has the political skills to be chief of staff during a presidential election year. While his managerial skills are unquestioned, Mr Lew has never been known as a “politico”. Mr Obama may need to bring in a seasoned political operator in a senior capacity to fulfil that function.
The president’s annual State of the Union address is scheduled for January 24, followed shortly by submission of his budget and economic report. These documents will lay out the White House’s agenda for the coming year and also be the foundations of Mr Obama’s case for re-election. With the economy being both the most important political and substantive issue he faces, failure to put forward viable economic and budgetary strategy could be highly damaging, politically, and leave policy adrift until after the election.
But while there is obviously danger in being forced to make a major staff change at an inconvenient time, Mr Obama may benefit by having an opportunity to set a new tone and direction for his presidency. In Mr Lew he has someone he can rely upon, who is well versed in the issues upon which his re-election will succeed or fail. It could be a blessing in disguise.
The writer served in the administrations of Ronald Reagan and George H. W. Bush. His latest book, ‘The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take’, was reviewed in the Financial Times this week