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"  Originally published in the December 2009 issue July 16 was the low point. Since the early days of the Obama administration, Peter Orszag had been making a simple argument: that reforming health care would &amp;quot;bend the curve&amp;quot; on health-care expenses and end up saving the country billions and billions of dollars \u2014 the beguiling argument that we could eat our cake and end up with more cake. He&amp;#039;d been saying it so often that the notion had become central to the president&amp;#039;s thinking, and Obama had adopted Orszag&amp;#039;s language as his own. As head of the president&amp;#039;s Office of Management and Budget, the man responsible for minding the nation&amp;#039;s accounts, Orszag had wagered a large portion of his prestige and power on that single proposition. But on July 16, the Congressional Budget Office delivered a stinging critique of the health-care proposals. Not only did the Democrats fail to propose &amp;quot;the sort of fundamental changes&amp;quot; needed to control costs, the CBO said, they made it much more expensive. Behind the scenes was a human drama. Orszag&amp;#039;s last job was as head of the CBO, where the rigor and honesty of his economic reports impressed members of both parties. But the new CBO head seemed to be going out of his way to make the criticism personal. &amp;quot;The curve is being raised,&amp;quot; he said.  The Washington Post called the criticism &amp;quot;devastating.&amp;quot; Orszag responded with his version of a fiery blog post: &amp;quot;In providing a quantitative estimate of long-term effects without any analytical basis for doing so, CBO seems to have overstepped.&amp;quot; The war of the government accountants was on. Two months later, Orszag strides through the door of the Eisenhower Executive Office Building tall and straight in his blue pinstripe suit, shoulders back and posture perfect, black cowboy boots at one end and that unnaturally perfect clip-art hair at the other. A black SUV waits with its engine running. It&amp;#039;s September, the long weird summer of tea parties and death panels finally over, and despite the tension over health-care reform and all the other tasks he&amp;#039;s crammed into the last eight months \u2014 writing the United States budget, shepherding health-care reform and much of the stimulus bill, rethinking the federal bureaucracy, staffing the Office of Management and Budget with the most glittering collection of eggheads since the Roosevelt Brain Trust \u2014 he seems to be bursting with fresh energy. &amp;quot;It&amp;#039;s good to be back in full tempo,&amp;quot; he says. Sliding into his seat, he leans toward the driver. &amp;quot;Hey, Rod, on the way back, I have a 12:30, so we may have to hustle.&amp;quot; He turns to his assistant. &amp;quot;Did you say you have food?&amp;quot; &amp;quot;Yes, I do.&amp;quot; She hands him a snack plate, which he immediately tears open. &amp;quot;We&amp;#039;ll have a salad for you when you get back.&amp;quot; Orszag is forty, thin, and a runner. His metabolism is so high, he often eats two lunches \u2014 chicken and salad \u2014 usually at his desk.  As the SUV reaches the security gate, a Secret Service guard comes forward with his hand up. &amp;quot;You&amp;#039;ll have to use the other exit. There&amp;#039;s a suspicious car.&amp;quot; Rod starts backing up.  &amp;quot;This is the only time the Obama administration goes in reverse,&amp;quot; Orszag deadpans. &amp;quot;Do you want to go over the speech?&amp;quot; his assistant asks. &amp;quot;I&amp;#039;ve already done that \u2014 that&amp;#039;s the good part about waking up at four o&amp;#039;clock.&amp;quot; There&amp;#039;s been quite a buildup to this day, which is the date of President Obama&amp;#039;s &amp;quot;study hard and stay in school&amp;quot; speech to millions of American students. While conservatives attacked the speech as socialist indoctrination, the president mobilized his senior staff members to visit schools around the country. Orszag&amp;#039;s assignment is the Banneker Academic High School in inner-city Washington, where he turns out to be a one-man demonstration project of the administration&amp;#039;s scholarly passion. He starts while he&amp;#039;s still in his car, inhaling that snack plate and scanning a school fact sheet for useful data. The school has a 100 percent college-acceptance record, he notes approvingly. And the graduating class just got more than $8 million in scholarship money. A moment later the car pulls up to the modest brick building and the principal immediately starts plugging that 100 percent college-acceptance rate. &amp;quot;I read that,&amp;quot; Orszag says. &amp;quot;And $8 million in scholarship money.&amp;quot; She beams. A perfect student! As he tours the school, Orszag puts his hands in his jacket pockets, which looks awkward and can&amp;#039;t be good for the suit. There&amp;#039;s a bit of fuzz on the back of his neck. And there&amp;#039;s that voice \u2014 the high, boyish nerd voice that carries into his high government office a whiff of model airplanes and merit badges. Suddenly he stops. He&amp;#039;s in the middle of a hall, students flowing by, the principal talking, people waiting \u2014 but there&amp;#039;s a chart on the wall and he has to have a look. Orszag likes charts. It is the senior thesis sign-up sheet, the principal explains. On one side, there are about sixty names of famous writers like Aristotle and Shakespeare. On the other, the names of all the kids in the senior class. Orszag leans in for a second. &amp;quot;So Homer was on the list and then got crossed out?&amp;quot;  Yes, the principal says. His eye scans the list. &amp;quot;Too bad for Nicole,&amp;quot; he says. It&amp;#039;s a quick, almost involuntary bit of system analysis; Nicole signed up for Homer and therefore her thesis topic was denied. Orszag allows himself a tiny smile of satisfaction and moves on to the next task, attempting to connect to a classroom of urban high school students with a personal anecdote revealing his own struggle through hard times: &amp;quot;There&amp;#039;ve been times where I wondered whether it was worth continuing in my own education. For example, I was privileged to be working at the White House under the Clinton administration and had not finished my Ph.D., and I thought I was the cat&amp;#039;s meow. I thought, Everyone knows what I can do, no worries on finishing that Ph.D... .&amp;quot; It&amp;#039;s so supremely geeky, the kids laugh and applaud. But out in the big world, health-care reform is still falling apart. Orszag gives the kids his personal e-mail address and hurries out and moments later, Rod the driver is blasting his siren and running red lights, rushing Orszag to his next meeting.   Last November, the president-elect&amp;#039;s office called him up and said, Peter, we want you for the OMB. Just like that. No big discussion. Obama didn&amp;#039;t even want to meet. This was just days after the election, when November was still in single digits and the economy was crashing and there was no time to waste. They had to get moving. Even so, Orszag thought it was a little strange. The OMB is the beating heart and tingling nerve center of the vast behemoth known as the federal bureaucracy. It&amp;#039;s where the will of Congress and the White House is expressed in numbers, where the possibilities are mapped and the dead-end signs erected, where every federal office reports and the smallest regulations are vetted \u2014 everything from emission standards to workplace safety to the cars in our garages and the toys in the hands of our children. It supervises everything from the Department of Homeland Security to the Environmental Protection Agency to the Department of Energy. And the president didn&amp;#039;t even want to meet him? True, they knew each other from when Orszag ran the Congressional Budget Office. They&amp;#039;d met a couple of times. And he seemed almost destined for the job \u2014 an aide to Senator Tom Daschle at eighteen, the senior economist for the Council of Economic Advisers at twenty-six, President Clinton&amp;#039;s special assistant for economic policy at twenty-eight, summa cum laude in economics from Princeton, Ph.D. from the London School of Economics. But still. Talking to the president&amp;#039;s staff, he expressed a little dismay. They said, &amp;quot;Okay, if you want to.&amp;quot; So he flew out to Chicago. It was four, maybe five days after the election. The meeting was set for 10:00 A.M., so he came in the night before to be on time and maybe get in a morning run. But when he landed he found a message on his BlackBerry saying that the schedule was tight and the president-elect really didn&amp;#039;t feel like he needed the meeting. Typing with his thumbs, he shot a note back: &amp;quot;I&amp;#039;m already in Chicago. Do you want me to turn around and fly back?&amp;quot; &amp;quot;Hold on a minute,&amp;quot; they said. &amp;quot;We&amp;#039;ll check.&amp;quot; Five minutes later, he got another message: &amp;quot;Why don&amp;#039;t you come on in anyway?&amp;quot; But Obama was right. When they got together the following morning, spending most of forty-five minutes on the deficit and health care, Orszag didn&amp;#039;t offer much in the way of his own ideas. &amp;quot;I don&amp;#039;t know that my goals were an important part of the discussion,&amp;quot; is how he puts it. But they were already very much in sync, both centrists with a hunger for reform, both conciliators who pride themselves on being &amp;quot;evidence driven,&amp;quot; both born gradualists given to careful calibrations of their odds of success \u2014 and both with that slightly Vulcan way of running ones and zeros behind their eyes while they talk. But the clincher was Orszag&amp;#039;s special take on health care. If he was right, if they could actually save money through simple efficiency and good government reforms, then Obama&amp;#039;s promise of change might actually come true. There was no time to waste. &amp;quot;The day his nomination was announced in the paper,&amp;quot; says one OMB staffer, &amp;quot;I sent him an e-mail, &amp;#039;By any chance, do you need a doctor?&amp;#039; &amp;quot; And Zeke Emanuel had the job by nightfall. Another man sent in his r\u00E9sum\u00E9 that Friday at 4:45 P.M. and got a call back by 5:00 P.M.  Orszag&amp;#039;s next meeting with Obama was set for December 16, just five weeks ahead. On that date the administration&amp;#039;s new economic team would convene at the transition offices in Chicago with only two items on the agenda: hashing out its first budget and coming up with a plan to save the global economy from total collapse. They worked till midnight and went home to lie in bed with their BlackBerrys, firing off e-mails for the rest of the night. On the day of the meeting it was unusually cold in Chicago, with five inches of snow and so much ice that police closed down the city streets, an ominous reflection of the national mood. Orszag went first, presenting his rough draft of the budget with slides and charts. There was a &amp;quot;$2 trillion hole,&amp;quot; an enormous and crippling gap between what the country had been spending and what, after the crash, it was taking in. &amp;quot;It was not a pretty scene,&amp;quot; he remembers. Then Larry Summers went over his preliminary plans for what would become known as the Recovery Act, his responsibility as the president&amp;#039;s senior economic advisor. As head of the Council of Economic Advisers, Christina Romer covered the projections on the impacts of different stimulus scenarios. Quickly, two options emerged. They could stuff the budget hole with a trillion dollars of Keynesian deficit spending, which meant spending so fast that much of the cash would get frittered away. Or they could spend in a &amp;quot;cost-effective way&amp;quot; a sum that was much smaller, around $300 billion, and risk getting sucked deeper into the hole. As Orszag puts it, there was a &amp;quot;mismatch between the macro necessity and the micro policy perspective.&amp;quot; Orszag pushed for the lower number. This led to a certain amount of tension, which he will not discuss. But in the middle of the meeting, Obama left the room and the assistants dimmed the lights. He came back carrying a birthday cake, singing the birthday song. It was Orszag&amp;#039;s fortieth birthday. Then the lights came back up, and they decided to spend in the range of $675 to $775 billion. It was a compromise big enough to shock the nation. Orszag focused on putting the extra money into twenty-first-century efficiency improvements like broadband expansion and a program to study comparative health-care effectiveness. &amp;quot;There&amp;#039;s a lot in the Recovery Act that people haven&amp;#039;t really focused on,&amp;quot; he insists. &amp;quot;A lot of policy achievements.&amp;quot; Next came the enormous job of actually writing the budget, which was due just a month after the inauguration. Would they account for new plans like cap-and-trade? For the cost of the war in Iraq \u2014 which had never been accounted for in George W. Bush&amp;#039;s budgets? What about health-care reform? What about the endless sea of programs that needed to be cut or funded, ranging from the entrenched but ineffective Even Start literacy program (cut) to a useful home-visitation program (funded). Each decision required study, data, meetings, reports, and Orszag&amp;#039;s mastery of government finance put him in an increasingly powerful position. As Summers tells me, &amp;quot;When the president asks, &amp;#039;Is it possible to do X with the federal budget,&amp;#039; all eyes turn to Peter.&amp;quot; The result was a rare thing, a passionate government economic plan. It began with a scolding:  It is the responsibility of our elected leaders to create the conditions for our people to aim high, work hard, and realize the full promise of American life. Yet for far too long, the resilience, optimism, and industriousness of the American people have been frustrated by irresponsible policy choices in Washington. Prudent investments in education, clean energy, health care, and infrastructure were sacrificed for huge tax cuts for the wealthy and well-connected... . Step by step, Orszag and his team itemized the complaint: the middle class slipping further and further behind, 22 percent of the national income sucked up by the richest 1 percent, schools so overcrowded that one in five used gyms and cafeterias for classrooms, college tuition exploding, 46 million without health insurance, an aging power grid that sets business back $80 billion a year, the public debt up $6.4 trillion in the previous eight years. It is no coincidence that the policy failures of the past eight years have been accompanied by unprecedented Governmental secrecy and unprecedented access by lobbyists and the well-connected... . The solution? First, a fierce insistence on fiscal honesty. The Obama-nauts would account for the Iraq war, &amp;quot;shine a bright light&amp;quot; on lobbyists, increase transparency, bolster oversight, restore the &amp;quot;pay-as-you-go&amp;quot; rule that required a clear source of funding for each new program, and avoid the usual budget tricks for hiding expenses, even though it meant a $2.6 trillion hit to the ten-year forecast.  Second, regardless of the apparent conflict, driven by the budget hole and need for those &amp;quot;prudent investments,&amp;quot; in combination with the Recovery Act, they would spend and spend and spend: $36 billion for roads and mass transit, $150 billion for clean energy, $13 billion for high-speed rail, $9.9 billion for clean water, $5 billion for science, $3.6 trillion in all \u2014 the largest budget in history, with a staggering $1.3 trillion deficit. Closest to Orszag&amp;#039;s heart was the $630 billion reserve fund set aside for health-care reform, a spectacular tribute to the initial success of his bend-the-curve argument \u2014 and his rising power within the Obama administration. But would the fiscal-honesty part end up clashing with the spend-spend-spend part? That was the trillion-dollar question.  In Orszag&amp;#039;s lair the stairs are steep and many, rising to a massive pile of granite that looks like a German expressionist&amp;#039;s idea of a fortress of bureaucracy. Then there&amp;#039;s a metal detector and another set of steep granite stairs rising in a sweeping curve and finally you stagger out into the granite hallways of the OMB. Here they like to think of themselves as the truest meritocracy ever to work for the people of the United States, a level of self-regard that some on Capitol Hill find annoying. Even the OMB communications director has a Ph.D. from Oxford.  In a narrow office toward the east side of the building we find the infamous Zeke Emanuel, the guy the tea-bag protestors accuse of wanting to kill our grannies. He comes around his desk with a blast of wholesome enthusiasm that suggests a highly caffeinated Mr. Rogers. It is just so great to get a chance to have an impact on global health, he says \u2014 if you want to improve the chance of kids living past the age of five, which nine million kids in this world don&amp;#039;t manage, you want to focus on diseases like pneumonia, diarrhea, malaria. He published a paper on this subject just weeks before he got Orszag&amp;#039;s call last November. &amp;quot;You write something and you publish it and four months later, you&amp;#039;re implementing a version of it!&amp;quot; Up another steep set of stairs to the office of Jeffrey Liebman, another tall, skinny, balding guy with amazing credentials: magna cum laude from Yale, Ph.D. from Harvard, chair at the Kennedy School, youthful member of Clinton&amp;#039;s National Economic Council yet bipartisan enough to have worked with Bush and McCain loyalists on a plan for partial privatization of Social Security. Growing up in a household that idolized Bobby Kennedy, he devoted his wild early years to microeconomic studies of how to build a stronger middle class and how to encourage poor people to save more for retirement. &amp;quot;I just did an hour on fixing government contracting,&amp;quot; he says. &amp;quot;I did a meeting on pension policy. Every day is like that, eight successive meetings on eight different topics, every one really important and interesting.&amp;quot; Another walk down the hall leads to Preeta Bansal, magna cum laude from Harvard, magna cum laude from Harvard Law, an editor at the Harvard Law Review, clerk for the Supreme Court, former solicitor general of New York, member of the Council on Foreign Relations. Another leads to Xavier de Souza Briggs, a sleepy-looking young man with an earring and another glittering r\u00E9sum\u00E9: Stanford, Harvard, and Columbia to MIT, where books like The Geography of Opportunity and Democracy as Problem Solving made him one of the nation&amp;#039;s leading urban planners. The businessman is Jeff Zients, who made millions improving health-care delivery and now spends his days trying to bring business efficiencies to our vast bureaucracy. Also Robert Gordon, Yale Law by way of Harvard; Rob Nabors, just twenty-seven when he became the senior advisor to then-OMB director Jack Lew; Steve Kosiak, Princeton to Georgetown to a top military think tank; Sendhil Mullainathan, the economics wunderkind who won a MacArthur genius grant at twenty-nine. Most representative of all is the strangely controversial Cass Sunstein, the University of Chicago professor whose ideas about behavioral economics probably crystallize the fondest dream of both Orszag and Obama \u2014 that instead of the command economy feared by right-wingers, the government can use &amp;quot;availability cascades&amp;quot; and &amp;quot;choice architecture&amp;quot; to nudge Americans into making better decisions, saving the world not by struggle or conflict or ugly partisan haggling but simply by putting the fruit next to the cash register and the Doritos away on a dusty shelf. For Orszag, this dream turns out to be a piece of autobiography. In his freshman year of high school, after his father took a job as a math professor at Princeton and moved the family from Massachusetts, Orszag decided to transfer to a local school because he liked the football coach. He played wide receiver in those days, loved the Red Sox and Larry Bird, played computer games with his brothers, went to summer camp in Maine every summer, liked Billy Joel and the J. Geils Band but loved Bruce Springsteen. Somewhere, it is said, there is a video of Orszag, leather jacket and bandanna, lip-synching &amp;quot;Born in the U.S.A.&amp;quot; His parents put a &amp;quot;huge amount of emphasis&amp;quot; on education, says his brother Jon. &amp;quot;It was critical that we were going to good schools, that we worked hard, did our homework.&amp;quot; So Orszag quickly decided his courses weren&amp;#039;t challenging enough and asked their permission to move to the Phillips Exeter Academy, an elite boarding school in New Hampshire. He tells the story of showing up mid-semester and hearing, in his very first class, a particularly brilliant boy decode a poem in ways he couldn&amp;#039;t begin to understand. &amp;quot;I went, &amp;#039;Oh, my God, I have made such a mistake. I am so out of my league.&amp;#039; &amp;quot; So began his ferocious academic drive. The family dynamic isn&amp;#039;t too hard to understand, he admits. &amp;quot;My mom is a very warm, typical sort of Jewish-mother type. And my dad has a somewhat, um, different personality.&amp;quot;  He spent part of his senior year as an intern in Tom Daschle&amp;#039;s office, which gave him a first thrilling taste of Washington. At eighteen, he was writing speeches for a senator. But it was his first college economics class that closed the deal. His professor was Alan S. Blinder, one of the country&amp;#039;s leading economists and also the author of a book that would have a permanent impact on Orszag: Hard Heads, Soft Hearts: Tough-Minded Economics for a Just Society. It was his family dynamic written in the language of high reason. &amp;quot;It wasn&amp;#039;t just abstract physics and it wasn&amp;#039;t just well-intentioned concern,&amp;quot; he says. &amp;quot;It was the combination of the two.&amp;quot;  The final lightbulb went off when he turned in a paper analyzing an editorial in The Wall Street Journal. By applying the tools of microeconomics, Orszag found a &amp;quot;huge non sequitur&amp;quot; hidden in a middle paragraph. Blinder told him that nobody else in the class noticed it. At that moment, &amp;quot;the future sort of clicked.&amp;quot; The rest flowed: summa cum laude, a Marshall Scholarship to the London School of Economics, a year in Russia under the tutelage of the eminent Richard Layard, a call from Blinder to join Clinton&amp;#039;s Council of Economic Advisers, catching the eye of superstar economists like Joseph Stiglitz. &amp;quot;There was a lot of clamoring for his ser-vices,&amp;quot; Blinder recalls. &amp;quot;He was very hardworking, very well organized, very reliable. Peter got a task and he did it and he did it well, accurately and thoroughly.&amp;quot; Later came the Brookings Institution, where he and Liebman developed some of their core ideas about choice architecture and middle-class prosperity. Then the Congressional Budget Office, where a member of the CBO&amp;#039;s health panel remembers the impression Orszag made: &amp;quot;He was in charge, he knew what he was talking about, he had this fresh appearance \u2014 you thought, This guy should be in the West Wing.&amp;quot; Now it&amp;#039;s just after 7:00 P.M., a balmy Washington evening in September. Orszag&amp;#039;s office is a giant, elegant room with more patterned wallpaper and wedding-cake molding than the Palace of Versailles. There&amp;#039;s a desk, a seating area with a sofa and armchairs, a gleaming mahogany conference table, a big flat-screen TV split into four panels, a desk with two computers. The office of the secretary of state until 1947, it is the room where the Spanish ambassador was handed his passport at the start of the Spanish American War and Cordell Hull summoned the Japanese diplomats after Pearl Harbor. &amp;quot;There are also some mixed legacies,&amp;quot; Orszag says. &amp;quot;They did Iran-contra out of here in the eighties.&amp;quot; It&amp;#039;s time. Orszag sits down at his long mahogany conference table and opens his briefing book. Assistants take their places. In comes Christina Romer, the chairwoman of the Council of Economic Advisers, cheerful in her red power jacket. This is the official presentation of the Obama administration&amp;#039;s new budget estimates to the assembled financial reporters of the nation, and the numbers are bad \u2014 a $1.58 trillion deficit this year alone, $2 trillion worse than expected over ten years. When all the reporters are ready, Orszag leans forward and begins talking into the speakerphone. &amp;quot;For those of you who follow the evolution of budget figures closely, there&amp;#039;s not a lot of surprises here. Relative to our previous numbers, the midsession review shows a smaller 2009 deficit, but larger out-year deficit. Let me explain briefly why...&amp;quot; Confident and calm, he drones on for another ten minutes, so undramatic and low-key that it&amp;#039;s almost hard to remember why a $2 trillion deficit is supposed to be such a big deal. It&amp;#039;s the economist&amp;#039;s version of playing guitar with your teeth. On this level, he&amp;#039;s unbeatable. But then he suddenly switches gears. &amp;quot;Let me be very clear \u2014 I know there are going to be some who say that this report proves that we can&amp;#039;t afford health reform. I think that has it backwards. The fiscal gap is precisely why we must enact well-designed and fiscally responsible health reform now.&amp;quot; At the moment, it seems feisty and combative, maybe even touched by a bit of hubris. Are deficits the way fate punishes economists who push ahead of the numbers?  A few weeks later, in early October, the CBO puts out a new analysis of the Senate Finance Committee&amp;#039;s health-care reform bill. This one actually will &amp;quot;bend the curve,&amp;quot; the report says. It will save the government at least $81 billion over ten years, maybe more.  The news rockets around Washington, fuel-ing a sense of triumph among Democrats. Orszag arrives back at his office in the middle of the fuss. A handful of staff are waiting with the news. He scans the report and smiles with his eyes just like he did when he decoded the senior-class sign-up sheet, with that same quiet pause as the numbers whirl and fall into place just as he expected them to, then looks at his staff and allows himself a moment&amp;#039;s satisfaction.  &amp;quot;Well,&amp;quot; Orszag says, &amp;quot;content matters.&amp;quot; "^^<http://www.w3.org/2001/XMLSchema#string>
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