POSTED: Wednesday, January 9, 2013 - 1:00pm
UPDATED: Wednesday, January 9, 2013 - 1:04pm
WASHINGTON (CNNMoney) — President Obama will nominate his White House chief of staff, Jacob "Jack" Lew, to be the next U.S. Treasury Secretary, a source with knowledge of the nomination tells CNN. The nomination is expected to be announced this week.
Lew, 57, has been the leading candidate for months and would be the second Treasury Secretary during the Obama administration.
Lew has been a key player in major budget talks in times of surplus and deficits as a former budget director for Presidents Obama and Bill Clinton.
He was also a key player in the 2011 debt ceiling talks, where he earned some criticism from Republicans for his uncompromising attention to detail. Some Republicans have also been concerned about Lew's lack of business and financial markets experience.
It's not clear when the Senate will begin confirmation hearings. In 2009, the Senate took nearly a month to confirm Tim Geithner as Treasury Secretary. This could be just as contentious, coming right after a bruising fight over the fiscal cliff.
Geithner, the last holdover from President Obama's original economic team, is ready to move back to New York, where his family currently lives.
The Secretary of the Treasury runs U.S. domestic monetary policy and is charged with collecting federal taxes and managing public debt, among other duties.
Timing for the Treasury appointment is especially critical because Lew is expected to play an important role in upcoming debates.
Congress must increase the government's borrowing limit by late February or early March. Without that, the federal government would be unable to pay all its obligations on time.
The country hit its $16.394 trillion limit on Dec. 31, and Treasury is already moving money around to buy time. The last time a similar debate occurred, in the summer of 2011, it turned nasty: the United States lost its AAA credit rating, and markets tumbled.
Another issue: looming budget cuts. As part of the fiscal cliff deal, Congress pushed back severe cuts to the federal budget by two months. They had been scheduled to kick in Jan. 2 and are expected to lead to job losses and furloughs for federal employees.
Lew's long career in Washington makes him perfect for the job, said Kenneth Baer, a former senior adviser to Lew at the White House budget office. Lew's experience in political horse trading goes back to the 1980s, when he was a senior adviser to legendary Democrat dealmaker House Speaker Thomas P. (Tip) O'Neill Jr.
"He is someone who has had such a long career in Washington, and no one has a bad word to say. And there's a reason for it," said Baer, who is now the managing director at the communications firm the Harbour Group. "He knows his material and cares deeply about public service."
But it has not necessarily been all smooth sailing for Lew. In the summer of 2011, Lew got on the wrong side of Republicans during tense closed-door negotiations over raising the federal debt ceiling.
Bob Woodward reported in his book "The Price of Politics" that, at one point, Speaker John Boehner asked the president to keep Lew from attending talks with House Republicans at the Capitol.
"Jack Lew said 'No' 999,000 times out of a million," Boehner told Woodward. "At one point I told the president, keep him out of here. I don't need somebody who just knows how to say 'No."
Lew has some private-sector experience under his belt. From 2006 through 2009, he was chief operating officer at a division in Citigroup, specifically in an area of the bank that made bets against the housing market.
During his 2010 confirmation hearing, Lew sought to distance himself from being seen as a bank executive with a role in the real estate bubble and bust. He pointed out that he had been a manager and not an investment adviser.
Lew also worked as a financial administrator at New York University from 2001 to 2006.
Lew received an undergraduate degree at Harvard University and a law degree from Georgetown University.