DeLong Smackdown Watch: Paul Krugman Outs Me
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I Really, Really Do Not Get This...

Anna Fifield writes:

Obama taps Lew for budget office: President Barack Obama on Tuesday nominated Jack Lew as the new director of the White House Office of Management and Budget, putting someone who helped President Bill Clinton to balance the books in charge of the government finances. Mr Lew will take over from Peter Orszag, who is leaving after 18 months, partly in frustration over his lack of success in persuading the Obama administration to tackle the fiscal deficit more aggressively, the FT reported earlier this month...

But... but... but... in his year and a half in office, Peter Orszag persuaded the Obama administration to support and the Congress to pass the most aggressive and substantial whack at the long-term U.S. government budget deficit ever. The provisions of ObamaCare--the PPACA, iPAB, and the tax on high-cost health insurance plans--have reduced the long-term fifty-year extended-baseline fiscal gap projected by the Congressional Budget Office from 2.6% of GDP last year to 0.8% of GDP now. That is a fifty-year present-value net budget savings of an incredible and unbelievable amount: $12,600,000,000,000. And all of it is now lockboxed by 60-vote points of order in the Senate: it will be hard for Congress to undo any piece of it. No OMB Director ever in the past has, and it will be a long time before any OMB Director in the future will ever be able to claim that they have swung the fifty-year balance of the federal budget by $12,600,000,000,000--that's $42,000 less of net borrowing for every man, woman, and child in the United States today.

Now it is certainly true that these policy choices that Peter drove might be reversed in the future--indeed, Congressional Budget Office Director Doug Elmendorf is unwilling to bet that any of them will survive intact beyond 2020. They, he politely says, "might be difficult to sustain for a long period."

But the fact that some future OMB Director--some feckless Mitch Daniels or David Stockman type--might be able to rally the Congress and the President of that time to undo what Peter Orszag has accomplished does not mean that he has not accomplished it.