U.S. President Barack Obama announces that White House Chief of Staff Jack Lew (R) will be his nominee for U.S. Treasury Secretary, replacing Timothy Geithner (L), in the East Room of the White House in Washington, January 10, 2013.

WASHINGTON | Thu Jan 10, 2013 7:53pm EST

WASHINGTON (Reuters) - President Barack Obama broke the mold on Thursday by choosing a budget wonk to serve as U.S. Treasury secretary, leaving gaps on the international and financial side that could make for a rocky transition.

Jack Lew, Obama's chief of staff, was chosen to lead the Treasury Department as the White House heads into another round of difficult talks with Congress on how to put the nation on a sound fiscal path.

By tapping a two-time White House budget director, Obama signaled the importance he places on the ongoing budget battles.

If the Senate confirms Lew, as widely expected, the budget expert's most pressing task will be to ensure that Congress raises the nation's debt ceiling in time for the United States to avoid a damaging default and credit-rating downgrades.

In selecting a Washington insider, Obama has potentially left the Treasury Department with holes in crucial areas: financial markets, regulation and international economics.

Obama's outgoing Treasury secretary, Timothy Geithner, was previously president of the New York Federal Reserve Bank, where part of his job was to liaise with Wall Street and regulate big banks. He also had held top positions in President Bill Clinton's Treasury Department and at the International Monetary Fund.

Geithner's immediate predecessor, former Goldman Sachs CEO Hank Paulson, was also deeply steeped in the ways of Wall Street, as was Geithner's boss during the Clinton administration, then-Treasury Secretary Robert Rubin.

"Jack Lew is by all accounts highly qualified to be secretary of the Treasury," said Dennis Kelleher, the chief executive of the left-leaning group Better Markets, which supports tougher financial regulation.

"The one area of concern is whether or not he is sufficiently committed to quickly and thoroughly implementing financial reform and re-regulating Wall Street."

WALL STREET SHORT-TIMER

Bankers and other financial services executives privately expressed concern that Lew lacked financial markets experience, even though he worked on Wall Street for two years. Sheila Bair, a former bank regulator, told CNBC television on Wednesday that "someone with a little broader perspective would be good."

Lew, who is known as a strong administrator, admitted his financial experience was scant when he was vetted by the Senate to serve as a State Department deputy secretary and then as Obama's budget chief.

At a Senate Budget Committee hearing in September 2010, he was pressed by Senator Bernie Sanders for his views on whether deregulation contributed significantly to the 2007-2009 financial crisis.

"I don't consider myself an expert in some of these aspects of the financial industry," Lew responded. "My experience with the financial industry has been as a manager, not as an investment adviser."

"I don't personally know the extent to which deregulation drove it, but I don't believe that deregulation was the, you know, proximate cause," he added.

Those comments upset Sanders, a political independent who supports tougher regulation. Sanders voted against Lew's selection as budget chief, and on Thursday said he was prepared to vote against him again.

While Lew is expected to win confirmation, he could face a fair amount of opposition from a combination of left-leaning, pro-regulation lawmakers like Sanders and Republicans who have clashed with the nominee in past budget talks.

During his time on Wall Street, Lew was the chief operating officer of Citigroup's global wealth management division. He later became COO for Citi Alternative Investments, a largely administrative role that was apart from investment decisions that portfolio managers would have made.

"I found that things he was responsible for doing worked better after he joined," said Todd Thomson, who headed Citigroup's wealth management unit in 2006 and hired Lew. "He's very good at working across an organization, and bringing people together to resolve issues."

Lew joined Citi on the recommendation of former Treasury Secretary Robert Rubin, who was then chairman of Citigroup's executive committee. Rubin knew Lew from their time together in the Clinton administration.

LEW WHO?

Outside of Washington policy circles, Lew is little known. A number of financial officials in Asia and Europe drew a blank when asked by Reuters for their appraisal.

"People in the know should know a person who has served as OMB (Office of Management and Budget) chief. To me he is a total stranger," said one official of a Group of 20 nation.

As Treasury secretary, Lew will not only have to represent the United States on the global stage, but he will have to deal with a host of tricky international economic problems from the challenges presented by China's growing economic clout to Europe's debt crisis.

One euro zone official involved in fighting the region's debt problems said he was encouraged by Obama's pick.

"The sign it sends is that (the United States) will be serious about the deficit and fiscal policy since (Lew) is an experienced fiscal policy specialist," the official said.

If confirmed, Lew would come to the Treasury Department at a critical time for regulation. The Treasury secretary is essentially a regulator-in-chief who chairs the relatively new Financial Stability Oversight Council, a panel comprised of the country's top banking and market regulators.

As chairman, he would have the authority to veto any FSOC initiative, even if all of the other members disagree.

The council is currently receiving comments on a controversial framework that proposes stringent new regulations on money market funds. It is also close to imposing additional rules on a handful of large, complex financial institutions meant to ensure they never threaten the stability of the financial system.

Both initiatives could be put on hold as Lew gets up to speed, or a top deputy could be required to play a bigger role.

QUICK STUDY

The 57-year old Lew is considered a quick study.

He was a rising star when he served as a top policy adviser to then-House of Representatives Speaker Tip O'Neill in the 1980s, a Democrat who worked with Republican President Ronald Reagan to reform the tax code and put the Social Security retirement program on more solid footing.

Former Securities and Exchange Commission Chairman Arthur Levitt said Lew could handle any issue and that his lack of regulatory experience was not a problem.

Levitt said Lew was a strong defender of the SEC when Republicans once threatened to cut the agency's budget over rules Levitt pushed to reduce auditor conflicts of interest. "I would say Jack Lew is probably a better person from an investor's point of view than anyone I could think of," he said.

The Chamber of Commerce, the country's biggest business lobby, and other influential trade and lobby groups also said Lew has the skills for the top U.S. economic post.

Lew's selection could put pressure on the Obama administration to find a deputy with business and financial experience to help round out Lew's deep knowledge of Congress and the budget. Current Treasury No. 2 Neal Wolin is expected to depart once he assures a smooth transition is in place.

"It's important (Lew) has people around him who understand the markets," said Tom Quaadman, a vice president with the Chamber. "So I think it will be more telling, to a degree, who he brings with him into the department itself."

(Additional reporting by David Henry, Dan Wilchins, Jan Strupczewski, Tetsushi Kajimoto and Andrew Quinn; Editing by Tim Ahmann and Will Dunham)

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U.S. President Barack Obama gestures while addressing his first news conference since his reelection, at the White House in Washington November 14, 2012.

WASHINGTON | Sun Dec 30, 2012 4:30pm EST

WASHINGTON (Reuters) - President Barack Obama is pledging to focus in his second term on immigration reform, boosting economic growth through infrastructure repair and energy policies that nod to environmental protection.

The president is mired in a difficult fight with congressional Republicans to avoid sharp spending cuts and steep tax increases collectively referred to as the "fiscal cliff." However, he still has a longer-term to-do list for his remaining four years in office, he said in an interview on NBC's "Meet the Press" that was broadcast on Sunday.

Obama, who won re-election in November after a campaign in which he succeeded in painting himself as a strong advocate for the middle class and those aspiring to join it, also promised in the interview to make a run at passing gun control legislation in the first year of his second term.

"Fixing our broken immigration system is a top priority," he said. He renewed a pledge to introduce legislation in the first year of his second term to get it done.

Immigration reform is a sensitive subject for the president, who failed to fulfill his promise to revamp the system during his first term. Latino voters were a critical part of the coalition that helped get him re-elected, a fact that may soften political opposition from Republicans, who are eager to bolster their support with that demographic group.

Immigration reform supporters on the left believe that the 11 million undocumented foreigners in the United States should be allowed a path to work toward citizenship. But opponents believe that this approach would reward people who broke the law by coming to the United States illegally.

Republicans have sought stronger measures to keep illegal immigrants from entering the United States from Mexico. Advocates on both sides of the debate want to more effectively verify legal workers in an economy in which businesses want to hire non-U.S. workers ranging from low-paid farm hands to technology-savvy professionals.

While negotiations to avoid the fiscal cliff have hogged the spotlight in the first weeks after the election, Obama said he wants to take steps to ensure the sluggish recovery gains steam.

Many observers had believed a persistently high level of unemployment would thwart Obama's chances of winning a second term. The U.S. jobless rate peaked at 10 percent in 2009 after the harshest recession since the Great Depression but has been falling and dipped to 7.7 percent in November.

The president said rebuilding crumbling roads, bridges and schools could put people back to work and put the economy on a sounder footing. He said he would pair those steps - which would likely involve government spending - with deficit reduction measures to tame the nation's budget deficit.

The president also said energy policy would be a leading emphasis. He said he would focus on how the country can produce more energy and export energy, while also dealing with environmental challenges. He did not specify how he would do that. The president's effort to fight climate change with a broad emissions trading system failed during his first term.

When pressed, Obama added gun control to his list of priorities, reiterating his support for a ban on assault rifles and high capacity clips, as well as background checks.

(Reporting By Mark Felsenthal; Editing by Cynthia Osterman)

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U.S. Environmental Protection Agency Administrator Lisa Jackson, speaks during a news conference in Rio de Janeiro June 20, 2012.

WASHINGTON | Thu Dec 27, 2012 6:54pm EST

WASHINGTON (Reuters) - U.S. Environmental Protection Agency chief Lisa Jackson, who spearheaded the Obama administration's crackdown on carbon emissions, said on Thursday she will step down after almost four years of battles with Republican lawmakers and industry over proposed regulations.

Under her leadership, the agency declared for the first time that carbon dioxide was a danger to human health and could be regulated under the Clean Air Act, leading the EPA to develop a new regulatory regime to limit carbon emissions.

Industry groups and Republican lawmakers opposed Jackson's efforts to fight climate change, hauling her in for numerous hearings in Congress, and she faced some pushback from within the administration too.

She won praise from many environmental groups, while others complained her EPA was too timid. It was unclear what direction the administration will take on climate change during President Barack Obama's second term.

Obama thanked Jackson for her service, praising her work on mercury pollution limits, fighting climate change and helping set new fuel economy standards for vehicles.

"Under her leadership, the EPA has taken sensible and important steps to protect the air we breathe and the water we drink," Obama said in a statement.

Jackson, the first black administrator of the 17,000-strong EPA, said in a statement she was "confident the (EPA) ship is sailing in the right direction."

Jackson, 50, is expected to leave her cabinet position after Obama's State of the Union address in early 2013. Leading the list of potential replacements are Bob Perciasepe, deputy EPA administrator, who will take over the agency on an interim basis; and Kathleen McGinty, a former head of Pennsylvania's Department of Environmental Protection and a protégé of former U.S. Vice President Al Gore.

Also said to be in the mix are Gina McCarthy, the EPA's assistant administrator for the Office of Air and Radiation; and Mary Nichols, chair of the California Air Resources Board.

Jackson's departure was not a surprise. Analysts had not expected her to stay for Obama's second term.

The administration is expected to face a tough fight to get any potential nominee confirmed by the Senate -- especially any candidate seen as being in the mold of Jackson.

"Secretary Jackson played the environmental ‘bad cop' to President Obama's more moderate ‘good cop,' but the result of their tag-team effort has been a huge expansion of the EPA's power. That's the exact opposite of what is needed," said S. T. Karnick, research director at the Heartland Institute, a Chicago group that is skeptical of man-made climate change.

Jackson is the first major energy policy official to step aside since Obama's re-election last month. Some have speculated that Energy Secretary Steven Chu, a Nobel prize-winning physicist who has also clashed with industry, will also depart, as may Interior Secretary Ken Salazar.

BRUISING ENCOUNTERS

Republican lawmakers accused Jackson's EPA of massive government overreach that choked economic growth, and passed numerous bills aimed at undoing the regulations. Obama did not sign their bills into law, but the White House did begin to pull back or delay rules in the face of the relentless onslaught.

Some speculated Jackson would step down in 2011, when Obama decided to delay rules to restrict emissions of smog-forming chemicals from power plants.

"From an energy and consumer perspective, it has to be said that the Jackson EPA presided over some of the most expensive and controversial rules in agency history," said Scott Segal, director of the Electric Reliability Coordinating Council, which lobbied against many of the EPA's proposed regulations.

States and governors fought Jackson's rules in the courts, scoring a win in August when a U.S. appeals court overturned the EPA's Cross-State Air Pollution Rule, aimed at reducing harmful emissions from coal-burning power plants.

On Thursday, many environmentalists and public health advocates hailed Jackson, saying she leaves a legacy of cleaner air.

"Administrator Jackson has been one of the most effective leaders in the history of the Environmental Protection Agency," Larry Schweiger, president of the National Wildlife Federation.

Jackson is a chemical engineer by training, and reports in recent weeks suggested she might be under consideration for the post of president of Princeton University. She is also a one-time chief of staff of New Jersey Governor John Corzine, and other media reports say she may be mulling a run for governor of that state.

Despite contentious dealings with Congress, Jackson maintained a cordial relationship with one of her biggest critics, Senator Jim Inhofe. She even kept a photo of the Oklahoma Republican and his grandchildren in her office.

"Lisa Jackson and I disagreed on many issues and regulations while she headed the EPA, however, I have always appreciated her receptivity to my concerns, her accessibility and her honesty," said Inhofe, who has called climate change a hoax, chided the Obama administration for a "far left green agenda" and vigorously opposed carbon regulations.

Inhofe said Jackson's departure offers the White House the chance to appoint someone "who appreciates the needs of our economy."

UNFINISHED AGENDA INCLUDES FRACKING

A self-described pragmatist, Jackson passionately fought to limit air pollution. She often described her two sons' struggles with asthma when discussing the importance of clean air.

Jackson also rejected her critics' complaints that stronger environmental rules were incompatible with a robust economy.

When broad climate change legislation sputtered in Congress in 2010, the EPA became the White House's main vehicle for addressing carbon emissions.

Since then, the agency has finalized rules outlining restrictions on carbon emissions for new power plants, effectively prohibiting the construction of new coal-fired plants without carbon-capture and storage technology.

Natural Resources Defense Council President Frances Beinecke said Jackson's successor "will inherit an unfinished agenda that begins with the issuance of new health protections against carbon pollution from existing power plants - the largest remaining driver of climate change that needs to be controlled."

The EPA also will help decide whether the federal government will regulate hydraulic fracturing, or fracking. The drilling technique has sparked a boom in U.S. energy production but opponents have linked it to water pollution and other problems.

Most regulation of fracking has fallen to the states, but the EPA has said it plans to propose standards on wastewater from gas wells by 2014 and is considering rules that would require more disclosure about the chemicals used in fracking.

U.S. oil and gas production has reached record levels in recent years. Even so, drillers have complained that EPA has taken too heavy a hand in regulating energy production and warn that onerous rules could crimp oil and gas output.

"In the past four years, EPA has hindered development of our nation's oil and natural gas resources by making it difficult for America's independent producers to overcome the enormous regulatory obstacles to operate," said Julia Bell, spokeswoman for the Independent Petroleum Association of America.

(Additional reporting by Valerie Volcovici and Roberta Rampton; Editing by Ros Krasny, Will Dunham, Mohammad Zargham and David Gregorio)

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U.S. President Barack Obama speaks about the fiscal cliff at the White House in Washington December 21, 2012.

WASHINGTON | Wed Dec 26, 2012 1:23pm EST

WASHINGTON (Reuters) - It is one of those occasions that is quintessential Washington: the inauguration of a president, a multi-day festival of patriotism, politics, optimism and self-congratulation.

All of that will be on display on January 21, when President Barack Obama is publicly sworn in for his second four-year term. But this inauguration will be far less grand than Obama's first in 2009, when a record 1.8 million visitors flooded the city to see the nation's first black president take office.

This time the celebration is likely to attract no more than 800,000 or so guests, city officials estimate. As a result, some luxury hotel rooms and coveted tables at high-end restaurants are still available, less than a month before the inauguration.

The swanky Mandarin Oriental Hotel, with its sweeping views of the National Mall, initially required inauguration guests to make reservations for four nights. Now it has relaxed that requirement to three nights to try to fill its rooms.

But the "inauguration markup" still applies: The Mandarin's least expensive room, normally available for $295 a night, starts at $1,195 a night during the long inauguration weekend.

Even so, the demand for hotel and restaurant reservations for this inauguration pales compared with the rush that followed Obama's first election.

Back then, the scramble for accommodation was so desperate that homeowners and renters in Washington and its Maryland and Virginia suburbs leased their homes for the inauguration, creating a vast secondary market in housing that week.

Hundreds of those homeowners - including former Tennessee senator and actor and Fred Thompson, who offered to rent out his condominium for five days for $30,000 - sought to profit from the festivities and leave town to avoid the crowds.

Today the website Craigslist shows only a few dozen ads offering housing for the inauguration.

"They swarmed to the market last time," said real estate agent Hill Slowinski, who deals in luxury properties. "We are not seeing the same level of interest" this year.

The story is similar at the Palm restaurant, which offers a $54 rib-eye steak and is a favorite of Democratic power brokers. Some tables are still free for Sunday night, January 20, the evening before the ceremony.

Looking over the reservations for that night, Tommy Jacomo, who has run the restaurant for four decades, said: "It's mediocre. Nothing out of the ordinary."

Jacomo said that for many of Obama's supporters, the 2009 inaugural celebration was a history-making one that can't be topped.

"The second time, it's always not that big," he said.

That has been the case in recent second-term inaugurations, particularly Republican Ronald Reagan's in 1985. Thanks to brutally cold weather, that became a mostly-indoor affair in which Reagan took the oath of office and delivered his inaugural address in the U.S. Capitol Rotunda rather than outside the Capitol.

For Obama's second inauguration, the thrill might be lessened further by the fact that he will take the official oath of office from Chief Justice John Roberts in a closed ceremony the day before the public festivities - on January 20, as required by law.

Because that day falls on a Sunday, the public events - the swearing-in outside the Capitol, Obama's inaugural address, the parade down Pennsylvania Avenue from the Capitol to the White House, and the inaugural balls - will be held a day later.

Hans Bruland, the general manager of the Hay-Adams Hotel who is working his fifth inauguration, said the lack of excitement for a president's second time around should be expected.

He said the ongoing negotiations between the White House and Congress over looming tax increases and budget cuts - and the threat of economic calamity if some sort of deal isn't reached - are clouding the mood in Washington and could be affecting the plans of some potential celebrants.

Obama's first inauguration took place as a worldwide financial crisis was unfolding, but his history-making ascent to the White House seemed to trump such concerns, at least for a few days.

"Oftentimes, we don't remember what normal feels like," Bruland said. "People tend to panic a little."

FEWER INAUGURAL BALLS

Such economic jitters are one reason Obama's second inauguration will feature just two official balls, rather than the 10 that were held in 2009.

Both will be at the Washington Convention Center on January 21. One ball will be for the public and guests, the other primarily for military families and veterans.

There will be a few unofficial balls held by various groups, but this will be the fewest number of official inaugural balls by any president since Dwight Eisenhower's first term in 1953 - a reflection of Obama's effort to keep the celebration low-key at a time when many Americans are struggling financially.

For all that relative austerity, there will be plenty of opportunities for big-spending Obama supporters to wrap themselves in luxury.

For $60,000, guests can stay four nights in the Mandarin Oriental's presidential suite, with 24-hour butler service and a private dining room.

A champagne cork's flight from the White House, the Hay-Adams is renting its largest suite for $7,900 a night. Before the 2009 inauguration, Obama and his family occupied an entire wing of the hotel before he was able to move into his new digs at 1600 Pennsylvania Avenue.

One early indication that there will be fewer visitors filling such expensive beds - and contributing to the festivities - was the president's decision to widen the search for funds for his second inauguration.

In 2009, Team Obama raised a record $53 million for his inauguration, without donations from corporations, lobbyists, and political action committees as part of a "commitment to change business as usual in Washington."

This time, Obama supporters have welcomed donations from such groups. A spokesperson for the presidential inauguration committee, which manages the effort, declined to comment on the pace of fundraising so far.

In 2009, the maximum donation for individuals accepted by the committee was $50,000. This year, Obama's fundraising committee is encouraging gifts of $250,000 from individuals. That kind of generosity will earn givers access to VIP receptions, reserved seats for the inaugural parade and other benefits.

THE FIRE STILL BURNS

There is one group that appears to be fired up and ready to go to Washington: his former campaign workers.

One volunteer, Catherine Lyons, a phone bank coordinator in Emeryville, California, said she was so excited that she bought plane tickets for Washington before Obama's re-election was assured.

On the morning of November 6, Election Day, Lyons went online and bought a seat for a cross-country flight.

"It was a little risky," Lyons, 25, said. "Bravery or a little stupidity, however you want to see it."

Also heading to Washington will be Shomari Figures, 27, a lawyer who was a field organizer for Obama's campaign in Akron, Ohio.

"The excitement," Figures said, "is still there."

(Editing by David Lindsey and Xavier Briand)

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U.S. President Barack Obama greets members of the audience after delivering remarks at an election campaign fundraiser in Stamford, Connecticut, August 6, 2012.

WASHINGTON | Wed Aug 8, 2012 8:15pm EDT

WASHINGTON (Reuters) - Americans are increasingly pessimistic about the future but voters do not seem to be holding it against Democratic President Barack Obama, who slightly expanded his lead over Republican rival Mitt Romney this month, a new Reuters/Ipsos poll says.

Three months before the November 6 presidential election, nearly two-thirds of Americans think the country is moving in the wrong direction. Only 31 percent say it is moving in the right direction - the lowest number since December 2011.

But Obama's lead over Romney among registered voters was 49 percent to 42 percent, up slightly from the 6-point advantage the president held a month earlier over the former Massachusetts governor.

The results of the monthly poll - in which a majority of voters agreed that the economy is the most important problem facing the United States - suggest that the Obama campaign's efforts to paint Romney as being out of touch with the concerns of middle-class Americans could be preventing the Republican from gaining momentum in the race.

"The overall 'right track, wrong track' is worse than last month - the news hasn't been great lately," said Ipsos pollster Chris Jackson. "But Obama seems to be, to some extent, inoculated against some of the worst of that."

The telephone poll of 1,168 adults, including 1,014 registered voters, was taken from August 2 to August 6. During that period, the Labor Department reported that U.S. employers hired the most workers in five months but that the nation's jobless rate had risen to 8.3 percent from 8.2 percent.

Even so, in a reversal from July, registered voters thought Obama was stronger than Romney in dealing with jobs and the economy, and with tax issues.

The poll indicated that 46 percent of registered voters thought Obama was stronger on jobs and the economy, compared with 44 percent for Romney. And on tax matters, 49 percent saw Obama as stronger, compared with 38 percent for Romney.

In an advertising blitz that has been focused on a dozen politically divided states, Obama and his Democratic allies have been hammering Romney's record as a private equity executive at Bain Capital, accusing him of plundering companies and shipping jobs overseas.

'KITCHEN SINK' STRATEGY

The Obama team's ads also have questioned why Romney - who has an estimated fortune of up to $250 million - will not release more than two years of tax returns, and have suggested that Romney has paid far lower tax rates than most Americans.

"The Democrats' current strategy of just pummeling Romney on Bain and on the economy has been kind of a kitchen sink thing," Jackson said. "Even if it's not necessarily hurt Romney, it's given him no opportunity to build a lead."

Obama's new lead on the issue of jobs and the economy is particularly significant, Jackson said.

"That is the key issue in this race," he said. "For Romney to be able to make a convincing argument and to win the election, he's going to have to have a fairly significant lead over Obama on that measure."

Jackson said Romney - who has based his campaign on the notion that he would be better than Obama at dealing with the economy - likely needs to have at least a 5- to 8-point lead over Obama on the jobs and economy issue to win the election.

"There's certainly no case at the moment that Romney's building some sort of momentum toward victory here," Jackson said.

The Reuters/Ipsos survey, conducted over landline and cell phones, has a margin of error of 3 percent for all adults and 3.4 percent for registered voters.

(For the full poll, please click on the following link: here)

(Editing by David Lindsey and Vicki Allen)

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