A liberal senator plans to vote against confirming President Barack Obama's nominee for a top White House economic position.
Sen. Bernie Sanders, an Independent from Vermont who works closely with Democrats, said in a statement obtained by The Huffington Post that he won't vote to confirm Jacob "Jack" Lew, Obama's nominee to head the Office of Management and Budget because, after meeting with Lew, the senator "found too many echoes of the failed policies of the past in his responses to my questions on trade policy, Social Security, deregulation of banks and other issues."
"It is my strong belief that President Obama needs an OMB director who is willing to stand up to corporate America and the wealthy, say enough is enough, and fight for policies that protect the working class in this country," Sanders said in a statement. "Unfortunately, I do not believe Mr. Lew is the right man at this time for this important job."
During a confirmation hearing last week, Lew told the Senate Budget Committee that he didn't believe that deregulation led to the recent financial crisis. Lew, who if confirmed will be returning to a post he held during the last few years of the Clinton administration, served during an era that saw the deregulation of Wall Street in the form of the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000.
The two pieces of legislation repealed the law that long kept commercial banks from offering products or engaging in services more common to investment banks and eliminated virtually all regulation over the kind of derivatives that worsened the financial crisis.
Experts and policymakers, including U.S. Senators, commissioners at the Securities and Exchange Commission, top leaders in Congress, former financial regulators, Democratic Party organizations and even Obama himself have pointed to the deregulatory zeal of the Clinton and George W. Bush administrations as a major cause of the worst financial crisis since the Great Depression.
But during his testimony, Lew didn't appear to agree, putting him at odds with an administration and a party that touts its efforts at re-regulating Wall Street in pitches to voters and cast blame for the crisis in part on the deregulatory policies pursued by Bush and his fellow Republicans in Congress.
If the Senate confirms Lew for his post, he'll oversee an agency that's responsible for making sure federal rules conform with Obama's agenda. The Dodd-Frank financial regulation bill passed in the wake of the crisis requires at least 243 new rules, according to a July 21 note to clients by the law firm of Davis Polk & Wardwell. The firm says that number is likely a "significant underestimate."
The Obama pick worked at Citigroup from 2006 until he joined Hillary Clinton's State Department in January 2009, rising to chief operating officer of the bailed-out bank's Alternative Investments unit, a Citi division that engaged in proprietary trading and invested in hedge funds and private equity groups. The Huffington Post reported in July that Lew's unit invested in a hedge fund king who made billions correctly predicting that U.S. homeowners would not be able to make their mortgage payments.
Lew made millions at Citi, including a bonus of nearly $950,000 in 2009, just a few months after the bank received billions of dollars in a taxpayer rescue, according to disclosure forms filed with the federal government. The bank is still partly owned by taxpayers.
The Senate Homeland Security and Governmental Affairs Committee voted 9 to 0 on Tuesday morning in favor of Lew's nomination and referred him to the full Senate. The Senate Budget Committee expects to hold its vote Thursday.
READ Sanders' full statement below:
"Jack Lew has a long and distinguished career in public service and is clearly hard working and intelligent. Reluctantly, I will not vote to confirm Mr. Lew to be director of the Office of Management and Budget.
"As a result of the policies of President George W. Bush, the middle class in this country is collapsing, the gap between the very rich and everyone else is growing wider and we are continuing to hemorrhage good-paying manufacturing jobs overseas.
"Last week I applauded President Obama for appointing Elizabeth Warren to be the architect of the new Consumer Financial Protection Bureau. Professor Warren has a long track record of standing up for the middle class against the greed, recklessness and illegal behavior on Wall Street. We need more voices like Elizabeth Warren's sending a clear message that the rules have changed and that the middle class in this country has a strong advocate.
"Jack Lew was kind enough to meet with me last week in my office and to answer my questions at a Senate Budget Committee hearing. Frankly, I found too many echoes of the failed policies of the past in his responses to my questions on trade policy, Social Security, deregulation of banks and other issues.
"It is my strong belief that President Obama needs an OMB Director who is willing to stand up to corporate America and the wealthy, say enough is enough, and fight for policies that protect the working class in this country. Unfortunately, I do not believe Mr. Lew is the right man at this time for this important job."
Shahien Nasiripour is the business reporter for the Huffington Post. You can send him an e-mail; bookmark his page; subscribe to his RSS feed; follow him on Twitter; friend him on Facebook; become a fan; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.