It was the worst of times, it was the worst of times.  When Peter Orszag left his position of Director of Management and Budget director last July we heard stories about  in-fighting within President Obama’s economic team (the same way we hear stories about the foreign policy team today). This week’s New York magazine includes an interview with Orszag where he dished the dirt about the war to control the economy.

Depending on whose spin you believe, Orszag quit over principle, telling friends he was upset by Washington’s refusal to get serious about the deficit.
A less favorable view is that Orszag was marginalized by Emanuel and (then-senior adviser) David Axelrod. “He was accused of leaking and being disloyal,” said one Democrat close to the players. “The press loved Peter, which was part of the reason why the White House didn’t love him.”

There can only be one star in the Obama White House, and that’s Obama, and the progressives are not very forgiving:

When Citi announced that Orszag was joining the bank as a vice-chairman in December 2010, an angry chorus of progressive columnists immediately howled that he was a sellout, cashing in on his Washington connections.

Besides, Orszag tells New York he didn’t even want to the job as director of the Office of Management and Budget:

His falling-out with the White House was a dramatic reversal for Orszag, his first real career stumble. Looking back, Orszag now says he didn’t even want the job. I didn’t want to do it, he told me. Having worked in a White House before, I knew how the infighting can become all-consuming, and I didn’t want to fall into that trap again. Many of my mentors warned me that despite the no drama’ Obama campaign, once in office this White House would inevitably be like other sand possibly worse. And unfortunately that’s exactly what happened.

Instead of Hope and Change Orszag found Teeth and Talons.

All this public attention gave Orszag juice: He transformed the wonky Office of Management and Budget into a power center on the West Wing’s fiercely competitive economics team. He plunged into the intense debates over the $800 billion stimulus and was also a major player in the health-care fight. Orszag was a deficit hawk and clashed with Larry Summers, who wasn’t as focused on the long-term debt crisis. Orszag argued that some of the biggest things the White House could do to tame the deficit were to tackle health care and repeal all of the Bush tax cuts. True to his Rubinesque roots, Orszag lobbied for the deficit commission; Summers was against it, telling aides that the commission posed McChrystal risk, because its findings could box Obama into a corner, the way the former general’s leaked report about boosting troop levels in Afghanistan did.

Sounds as if the long process of figuring out what do do with Afghanistan really scarred the administration.

Orszag, who had run his own team at the Congressional Budget Office, didn’t always defer to Summers, and at one meeting, the pair reportedly fought over a chair across from Obama. Peter was somebody who could be a foil to Larry. He suffered from a small case of Summers-itis, where you display your brilliance, one budget-policy wonk who has worked with both men explains. 

The story also details battles with Larry Summers, then director of Obama’s National Economic Council. But in the end, it was Orszag’s tabloid troubles that pushed him out:

Orszag’s public profile, once one of his biggest assets, became a liability.
In January, a “Page Six” headline blared, “White House Budget Director Ditched Pregnant Girlfriend for ABC News Gal.” The tabloid detailed how Orszag had split with his pregnant girlfriend, the Greek shipping heiress Claire Milonas, and taken up with the younger Golodryga.The baby drama was not well received by the no-drama Obama administration. Seven months later, Orszag was out.

Even from the outside, Orszag upset White House officials with a New York Times column on tax policy.

This story tells of the ins and outs of the fights going on in the White House, fights that led us to where we are now, a fractured economic policy and a slow moving economy.

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