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Obama Budget Nominee to Focus on Efficiency, Budget Deficit

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June 11 (Bloomberg) -- President Barack Obama’s nominee to head the Office of Management and Budget said he’ll look to trim government programs to save money for education and other priorities as he presses to reduce deficits.

Shaun Donovan, the current secretary of the Department of Housing and Urban Development, said he intends to emphasize the management in his office’s title, using analytic tools and metrics to measure whether programs are working. Those that aren’t will be consolidated or eliminated, he said.

“I like data and management,” Donovan told the Senate Homeland Security and Government Affairs Committee at his confirmation hearing. “I’m actually passionate about it at HUD and drive my team crazy over it.”

Donovan faced tougher questioning before the Senate budget Committee later in the day.

The panel’s ranking Republican, Senator Jeff Sessions of Alabama, suggested Donovan had no plan for reining in entitlements such as Social Security and Medicare.

“We’re not on a sustainable path,” Sessions said, adding that interest payments on the national debt will be “the largest surge we’ve seen” from about $220 billion today to more than $800 billion a decade from now.

“ Its dead money, it’s not buying us anything.” said Senator Angus King, an independent from Maine, who added that Donovan has to be the guy “who says ‘no.’”

“If you are doing your job, you are not going to be popular.”

Medicare Costs

Donovan said Medicare growth can be slowed as medical costs increases are slowing. In addition, he said the president’s budget has $400 billion in addition Medicare savings, and there’s “wasteful spending in our tax code” that must be changed or eliminated.

Senator Ron Wyden, Democrat of Oregon, said he hoped Donovan would be confirmed by the summer recess in early August. The budget committee chairman, Washington Senator Patty Murray, said she wanted to act on the nomination “expeditiously,” without setting a deadline.

Donovan, 48, an Obama confidant, was nominated May 23 to serve as director of White House budget office, replacing Sylvia Mathews Burwell, the budget chief since April 2013. Burwell was confirmed last week to head the Department of Health and Human Services. Obama has nominated San Antonio Mayor Julian Castro to replace Donovan at HUD.

Donovan’s shift to OMB post keeps an Obama loyalist in the presidential orbit. He joined Obama as secretary of HUD when the president took office in 2009.

Little Opposition

While Obama’s relations with congressional Republicans are strained, Donovan hasn’t had any major fights with Congress and committee members indicated they expect him to be confirmed. Donovan was confirmed as HUD secretary by unanimous consent.

“I have no doubt you’re going to be approved” for confirmation, Senator Tom Coburn of Oklahoma, the top Republican on the Homeland Security and Governmental Affairs Committee, said. Donovan is “responsive to Congress, and I can’t say that about every member of this cabinet,” Senator Susan Collins, Republican of Maine, said.

Donovan defended the principles of Obama’s $3.9 trillion budget for 2015, which begins Oct. 1. He said the deficit has been cut in half in five years, as a percentage of the economy, yet the nation must still make investments in education, research and development to maintain its competitiveness with overseas rivals.

He said he would work toward a “commonsense balance” between the cost of federal regulations and the need to protect air and water.

Donovan said his data-driven approach at HUD led to a consolidation of 13 rental assistance programs “that sometimes aren’t logical.” He cleared the way for small mortgage lenders to use “e-signatures” to cut costs. Collins cited a reduction in homelessness by 16 percent and a 24 percent reduction among homeless veterans.

If confirmed, Donovan would be Obama’s fourth director, after Peter Orszag, Jack Lew and Burwell.

(An earlier version of this story was corrected to properly describe Donovan’s relationship with Burwell and Senator King’s party affiliation.)

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editors responsible for this story: Steven Komarow at skomarow1@bloomberg.net Joe Sobczyk

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