Obama Nominates Lew as Budget Director

Updated at 12:50 p.m. ET

President Barack Obama nominated Deputy Secretary of State Jacob Lew to serve as director of the Office of Management and Budget Tuesday, charging him with putting the nation on a fiscally responsible path.

"At a time when so many families are tightening their belts, he's going to make sure the government continues to tighten its own," Obama said in announcing Lew's selection at the White House.

"He's going to do this while making government more efficient, more responsive to the people it serves," Obama continued.

If confirmed by the Senate, Lew would assume the Cabinet-level post with the administration facing a deficit already exceeding $1 trillion for the first three quarters of the fiscal year.

Current projections show unsustainably large deficits predicted for the coming decade, but the administration has not devised a plan to wrestle them under control, instead pinning its hopes on a bipartisan fiscal commission that many believe is doomed to election-year gridlock.

Lew is no stranger to the job, having served as budget director for almost three years at the tail end of the Clinton administration. He presided over an era of surpluses that were fueled by the revenue boom of the late 1990s - when federal coffers were so flush that policymakers pressed to put extra Social Security revenues into a "lockbox" so that they wouldn't be used to fund other programs.

Lew would take over for current OMB director Peter Orszag, who is stepping down this month.

Secretary of State Hillary Rodham Clinton recruited Lew to serve as deputy secretary of state for management and resources, a position that had been created during the Bush administration but had never been filled. In that post, Lew was instrumental in securing increased funding for State Department operations and international affairs in Obama's first two proposed budgets.

But Lew was not a desk-bound accountant. In addition to maneuvering through the appropriations process, Lew was also a diplomat, traveling abroad to places like Iraq, Pakistan and Afghanistan to look into U.S. assistance programs and evaluate their efficiency and effectiveness.

"I was worried that Hillary would not let him go," Obama joked Tuesday.

Clinton said in a statement that while the news of Lew's appointment was "obviously bittersweet", she believes he is uniquely prepared to lead OMB. "The president and the nation need his leadership," she said.