Facing a brewing fight over the debt ceiling and spending cuts, President Obama today tapped his chief of staff, Jack Lew, to be the next Treasury secretary, elevating a close confidante and trusted adviser to the leading economic voice for the administration's second term.
At a midday news conference, Obama praised Lew, 57, as a "low-key guy who prefers to surround himself with policy experts rather than television cameras" and hailed his reputation as "a master of policy who can work with members of both parties and forge principled compromises."
The nod to Lew's political experience, as a former congressional staffer and Clinton administration budget director, highlights the political battles on the horizon in three new "fiscal cliffs": the debt ceiling, looming automatic spending cuts and a measure to fund the government for the coming year.
"As the son of a Polish immigrant, a man of deep and devout faith, Jack knows that every number on a page, every dollar we budget, every decision we make has to be an expression of who we wish to be as a nation, our values, the values that say everybody gets a fair shot at opportunity," Obama said.
If confirmed by the Senate, Lew will replace outgoing Treasury Secretary Timothy Geithner, the longest-serving member of Obama's economic team.
"When the history books are written, Tim Geithner is going to go down as one of our finest secretaries of the Treasury," Obama said, noting that the Treasury secretary helped craft the administration's response to the financial crisis of 2008 and 2009, the worst since the Great Depression.
"With the wreckage of our economy still smoldering and unstable, I asked him to help put it back together. And thanks in large part to his steady hand, our economy has been growing again for the past three years," Obama said.
Geithner is expected to remain at his post until Jan. 25. He is then believed to be returning to work in the private sector.
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As chief of staff for the past year, Lew has been intimately involved in the negotiations with Congress on the debt ceiling, averting a government shutdown last summer and the so-called fiscal cliff earlier this month.
A key factor in the president's decision was also Lew's ability to get right to work on the first crises ahead, having already forged relationships within the administration and across the economic team.
Lew's experience as Bill Clinton's budget director, when he helped craft a bi-partisan budget agreement that led to three years of budget surpluses, was also critical, Obama said.
Lew also has private-sector experience. Before joining the Obama administration in 2009 as deputy secretary of state, he served as the chief operating officer of Citigroup's Global Wealth Management and Alternative Investments divisions.
Obama's Treasury appointment now heads to the Senate for confirmation.
The top candidates to replace Lew as White House chief of staff include Deputy National Security Adviser Denis McDonough or Vice President Biden's current chief of staff, Ron Klain. Tom Nides, deputy secretary of state for management and resources, has also been discussed.
Geithner's departure is the fifth from the Obama cabinet at the start of the president's second term.
It follows announcements from Hillary Clinton at State, Leon Panetta at Defense, Hilda Solis at Labor, and Lisa Jackson at EPA. Transportation Secretary Ray LaHood has also long suggested he would not stay for a second term.
ABC News' Jonathan Karl contributed reporting.