And The Next OMB Director Will Be…

Washington is a place where it’s both important to know someone in power and to be seen as knowing someone who is rumored to be in line to be in power. It’s not at all surprising, therefore, that, with the White House’s announcement earlier this week that Jack Lew will become the administration’s next chief of staff, there’s been lots of very public speculation about who will replace him as the director of the Office of Management and Budget.

Several thoughts:

First, in general it’s going to be difficult for any presidential nominee for anything to get confirmed this year. Why would the White House want to undertake a series of bruising confirmation fights in Senate committees and on the Senate floor that, because of GOP filibusters, are highly unlikely to result in anyone actually getting confirmed.

Second, it’s also not clear who currently outside government is going to want to put his or her life on hold to go through the very painful vetting process and even more painful confirmation process for a job that may not exist after noon on Inauguration Day.

Third, the combination of these two means that the most likely scenario is that someone will be appointed to serve as acting OMB director through the election. That person would work until the start of the next administration if Obama is not re-elected and would be one of the people considered for the job full-time if the president wins in November.

This option has the added benefit for the White House of not having an extra round of hearings on budget issues and, therefore, denying the GOP an opportunity to get free national media on the deficit.

The acting OMB director scenario probably means that one of two people are in line to take over the agency — OMB Deputy Director for Budget Heather Higginbottom or Deputy Director for Management Jeffrey Zients.

Higginbottom may seem like the more natural fit, but she’s only been in the deputy slot since October 2011 and may not be ready to take over. Zients, got high marks when he served as acting OMB director in the period after Peter Orszag left and before Lew was confirmed.

There are three people to watch if the administration decides to nominate someone and go through the confirmation process.

Anyone who knows current National Economic Council Director Gene Sperling knows that he has lusted after OMB for years. I doubt that, as some budget insiders are suggesting, he would see the move from NEC to OMB as a step down in the policy food chain. In fact, Gene was interested in OMB after Orszag left even though he had been NEC director in the Clinton administration.

But Gene’s confirmation would be hell. As smart and good as he is, Gene has been part of every administration effort on the economy almost since the start of the Obama presidency (he was an advisor to Treasury Secretary Tim Geithner before he went to NEC). He also has some Goldman Sachs background that, while apparently very legitimate, would still be hung like an albatross around his neck by Senate Republicans.

Rob Nabors, who was the first deputy OMB director for budget in the Obama administration and then left to go to the White House where he is now director of legislative affairs, also gets high marks and supposedly is well liked and highly trusted within the administration.

The real sleeper, however, may be Senate Budget Committee Chairman Kent Conrad (D-ND), a deficit hawk who is retiring from the Senate at the end of this session of Congress. Current and former senators are often (although not always) treated better in the confirmation process than non-senators. In addition, an an outsider, Conrad would have to talk more about what he wants to do and what he tried to do at the budget committee rather than what the administration did. That would shift the focus of the hearings and make them far more benign and move Conrad up in the White House’s thinking.

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