President Obama’s former director of the Office of Management and Budget Peter Orszag fired back over criticism for his move to Citigroup as an example of the revolving door between big government and big business. He claims he had nothing to do with the White House’s financial rescue efforts, which is such a distortion of fact, it’s hard to know where to begin.
According to The Daily, Orszag explained:
Orszag could have been more careful about suggesting where he might “bump into” federal officials, actually — Starbucks is a venue of choice for lobbyists to meet with White House officials without having to disclose the session as required by Obama’s own ethics policy. It is so much so that even the New York Times reported on the ease of meeting with lobbyists at the popular coffee shop last June:
But the claim that Orszag had “almost nothing to do with the administration’s financial rescue or reform programs” is strange, especially given the photo above. In it, Orszag presents the Obama FY 2010 budget, which included the Troubled Asset Relief Program. From the section on the Treasury’s budget:
From his testimony (he in fact said this twice — once to the House, once to the Senate):
This is a budget. Orszag was the director of the White House Office of Management and Budget. So he’s still telling us he didn’t have anything to do with it?
Smoking gun aside, wouldn’t it be problematic for the main budget guy at the White House to not be involved in those decisions? Wouldn’t his non-involvement in the financial rescue actually be a sign of incompetence or worse? If, as director of the Office of Management and Budget, he didn’t run across the $700 billion bailout in the course of his work, shouldn’t he be disqualified from doing any work with budgets or numbers at all ever? What did he do with all that free time?
Well, he was involved — so involved that he got called out by Sen. Judd Gregg, R-N.H., for allowing funds from the Troubled Asset Relief Program to be used like a “piggy bank” (video here):
That really set off Gregg, who withdrew a nomination from the Obama White House to be commerce secretary.
“No, no, no, you cannot make that kind of statement with any legitimacy,” Gregg responded, his voice rising, Reuters reports. “You don’t appear to understand the law.”
Orszag tried to respond, beginning, “Okay …”
But Gregg would not hear it. He began reading from the TARP authorization law saying that unspent TARP funds must be used to pay down the national debt.
Here he is again in National Journal, defending TARP:
The second point is that we are projecting a net cost from [the initial $700 billion] TARP [authority] overall of $117 billion. We’ve put forward a financial services fee to try to offset that over time, as required by the [TARP] law. [The fee would recoup] $90 billion over [the next 10 years], and then it would continue until the TARP is repaid in full.
Citigroup, by the way, received $50 billion from taxpayers, which according to this New York Times chart, makes it a recipient of one of the largest bailouts overall!
So when Orszag argues that he had “almost nothing” to do with the financial rescue, what the heck does he mean? When he took the job, James Fallows at The Atlantic expressed his own disappointment in Orszag’s decision:
In fact, in the same article where he disputes his involvement with the bailouts, he goes on to boast the same as he boasted while in office — that banks had cleaned up their balance sheets. This was made possible by — you guessed it — TARP:
Another part of the problem is more general. Does Orszag really believe he could have gotten such a lucrative position at Citi had he not worked as Obama’s budget czar? Whether or not he interacts with federal officials doesn’t matter, because the message is clear: Play your cards right while in the White House and make sure not to ignore any deep-pocketed businesses, and you don’t even have to worry about your job prospects. They’ll be coming to you, just as Citi came to Orszag.
