The White House

Why Obama Named Jeff Zients His Top Economic Adviser


Jeff Zients in 2011

Photograph by Bill O'Leary/The Washington Post via Getty Images

Jeff Zients in 2011

Barack Obama is often depicted as an enemy of business, yet in many ways he’s brought more of business into government. He was the first president to add a chief technology officer to the White House staff. Jeff Zients, who had his own private equity firm and who ran two private consulting groups (Advisory Board Co. and Corporate Executive Board) joined the Office of Management and Budget in 2009 as the White House’s first chief performance officer, charged with making the federal government more efficient.

Today Obama named Zients as the next head of the National Economic Council. Since its inception during the Clinton administration, the position has been filled either with think-y economists or do-y practitioners. Zients belongs to the latter group. His appointment means that the president may be grabbing for the brass ring: a reorganization of the sprawling executive branch.

I spoke to Zients two years ago for a story on how Obama, like every president, was attempting to reorganize all the offices that answer to him. There are two ways to improve government from the White House. Some presidents just try to make everything work a little better, a little cheaper—they send down orders to buy fewer pencils. George W. Bush did this, quietly, with some success. Obama wants more. He’s been trying to move boxes—to actually combine federal agencies and remove their redundant functions.

Zients’s approach wasn’t popular with everyone. According to the New York Times, the president never nominated Zients to head the Office of Management and Budget, because in trying to streamline inefficiencies as chief performance officer Zients had annoyed Montana’s Max Baucus, the Democratic chairman of the Senate Finance Committee. Zients ran bang up against what Washington refers to as the “iron triangle.”

The iron triangle is composed of companies, agencies, and congressional oversight committees. Each has an interest in keeping things exactly the way they are. Companies that sell things to the government like things the way they are: complicated and not transparent. Agency heads like things the way they are: employed. Members of Congress who chair committees like power. To combine agencies, ultimately, is to relieve some committees of their power.

Zients never became OMB director because his work, at Obama’s behest, suggested making government more efficient and lawmakers such as Baucus less powerful. By picking Zients as his new chief economic adviser—a position that doesn’t require Senate confirmation—the president seems to be taking an end run around Congress—and offering Zients the opportunity finally to finish the work he started.

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Greeley is a staff writer for Bloomberg Businessweek in New York.

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