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Obama’s Budget Director Orszag Plans to Leave Cabinet Position

White House Budget Director Peter Orszag
U.S. Office of Management and Budget Director Peter Orszag pauses while speaking during an event in Washington. Photographer: Andrew Harrer/Bloomberg

White House Budget Director Peter Orszag plans to leave President Barack Obama’s Cabinet before the White House begins preparing its next budget, administration officials said.

Orszag, 41, considered leaving his post as director of the Office of Management and Budget in April and stayed on after an appeal from the president, the officials, who spoke on condition of anonymity, said. Orszag’s decision to leave in July will accelerate the process of picking a successor.

Orszag’s spokesman declined to comment directly on his plans. “Peter’s focused on his work, not on Washington speculation,” said Kenneth Baer, the budget office’s communications director.

The departure comes as Obama is putting his focus on slicing the federal deficit, forecast to reach a record $1.6 trillion this year. The president appointed a bipartisan panel to recommend ways to cut the shortfall, and its report is due in December.

Upon leaving the administration, Orszag will likely join a think tank, said one of the administration officials.

A former director of the Congressional Budget Office, Orszag has worked to advance two of Obama’s top legislative priorities: the $862 billion economic stimulus measure passed in February 2009 and the $940 billion health-care overhaul passed in March. As director of the budget office, he prepared both of Obama’s first two spending blueprints.

Potential Replacements

Among the potential replacements under consideration are Laura Tyson, a former director of the National Economic Council under President Bill Clinton, and Rob Nabors, who served as OMB deputy director under Orszag before moving to the White House to work under Chief of Staff Rahm Emanuel, said one of the officials.

The budget director’s post requires Senate confirmation.

Orszag’s departure would make him both the first member of Obama’s Cabinet and the first economic adviser to leave the administration.

His exit would come as the White House pushes an election- year, $55 billion jobs bill in the Senate, which would add to last year’s $862 billion stimulus package.

‘The timing makes sense,” said Douglas Holtz-Eakin, a former CBO director during President George W. Bush’s administration. ‘You want to have a new person for the full fall budget cycle, so that they are involved in all aspects of the preparation for the next budget.”

Earlier this month, Orszag announced a plan to force some federal agencies to reduce their fiscal 2012 budget requests by 5 percent to help cut the deficit.

“As stewards of the American people’s tax dollars, we cannot afford to waste money on programs that do not work, that are outdated or that are duplicative of one another,” he said in a speech on June 8 at the Center for American Progress.

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