President Obama has called in a ringer to fix the federal government's budget — and his renewed focus on the deficit could end up hitting feds where it hurts.

Jacob "Jack" Lew, who was selected last week to replace Peter Orszag as director of the Office of Management and Budget, headed the agency in the late 1990s, when the Clinton administration and congressional Republicans reached an agreement to balance the budget and turned deficits into a $236 billion surplus.

Now, the White House — smarting from months of Republican criticism over its deficit spending — is touting Lew's track record as a sign it takes the problem seriously.

"At a time when so many families are tightening their belts, [Lew is] going to make sure that the government continues to tighten its own," Obama said July 13, as he introduced Lew and specifically charged him with cutting the deficit and restoring fiscal responsibility.

Lew is respected by lawmakers and his former colleagues, who say that he's got the best shot of anyone at fixing the nation's fiscal problems.

"He's like a relief pitcher, brought in in the third or fourth inning of a game," said Jonathan Bruel, executive director of the IBM Center for the Business of Government and a former OMB executive. "He knows the administration, OMB and the budget process, and he's done it before. There's no one smarter than Jack."

But 2010 is not 1997, the year the balanced-budget deal was struck. And expecting Lew to work the same magic twice may be too much to ask.

The economy and tax revenues are still sputtering — a far cry from the tech boom that fueled economic growth in the late-1990s. The government is still fighting two wars and spending billions of dollars annually on post-Sept. 11 homeland security measures, whereas in the late 1990s, the end of the Cold War prompted the government to shrink defense and intelligence spending and staffing. And the millions of baby boomers are nearing retirement age, which will feed the demand on Social Security and Medicare.

"If anybody's expecting that during his tenure, we're going to have budget surpluses again, I don't know anyone who could achieve that standard," said John Palguta, vice president for policy at the Partnership for Public Service. "If he can just reduce the size of deficit, we'll be doing great."

Joseph Minarik, who was the Clinton administration's chief economist, said that addressing entitlements such as Social Security and Medicare is at the heart of fixing the deficit problem. But since entitlement reform won't yield results for several years — and the administration is feeling pressure to show results now — Minarik said that agencies' discretionary budgets could become short-term targets.

"There's very little that we can accomplish waiting for entitlement savings," said Minarik. "In the near term, we're going to have to take every dollar that isn't nailed down — and many dollars that are."

OMB has already told agencies to find as much as $75 billion in discretionary budget cuts for 2012, largely by getting rid of excess property and facilities, improving productivity through increased use of information technology, reducing improper payments, consolidating contracts and streamlining operations.

But those savings, even if fully realized, would only put a small dent in the nation's $1.4 trillion — and growing — annual deficit. This means that if the administration is serious about tackling the problem, it will have to consider deeper budget cuts.

This could mean that — despite Democratic efforts to safeguard them — federal pay raises, bonuses, travel, training dollars and other items seen as perks or optional spending could be limited or even scratched from agency budgets. Some experts say it will also result in painful cuts or reductions in programs.

"Managers have to do a sensible job and not try to defend every program in their bailiwick," said John Callahan, who was assistant secretary of management and budget at the Health and Human Services Department in the late 1990s. "There are programs that, if they went away tomorrow, wouldn't make a dime's worth of difference. If [small programs] don't have national scope, they shouldn't be in the budget."

Callahan said it will be up to senior agency leaders to check managers' territorial instincts to save marginal programs on the chopping block.

Janice Lachance, who ran the Office of Personnel Management during Clinton's second term, said staffing cuts are a possibility. Several leading Republicans in recent months have sought to shrink the size of the federal work force as a means of reducing the deficit.

"I think everything will be on the table," Lachance said. "But I don't necessarily agree with arbitrary cuts in the federal work force. You've got to identify what the goals are of a particular program, and how many people it takes to get the job done."

The deficit-reduction effort also could renew emphasis on acquisition reform. The Defense Department hopes to save billions of dollars by overhauling its acquisition process to increase competition and the use of fixed-price contracts, and other efforts to more efficiently purchase weapons and services.

Lachance and Callahan said one of Lew's greatest strengths is his ability to hear out the concerns of all parties. That way, LaChance said, nobody felt that they were being targeted.

"That's not to say everybody agreed with what happened," Lachance said. "At the end of the day, probably nobody was happy, which may be the surest sign of success in something this complicated."

Lachance said Lew always listened to her case for federal pay raises. Though raises never ended up as large as she pushed for, she said she felt Lew understood the need to reward — and retain — hard workers through raises.

And for the next few years, Lachance believes, fed raises will likely be modest — if anything. But she thinks that cutting out federal pay raises entirely would be a mistake.

Lew's former colleagues said he was adept at holding agencies to their budgetary limitations.

"Jack was not a smoke-and-mirrors guy," Breul said. "He didn't use gimmicks and funny numbers. The budget actually got cut and everyone stayed within [pay-as-you-go] requirements."

And perhaps most importantly, Lew worked with Congress to keep lawmakers from inflating agency budgets beyond what the executive branch had agreed to.

"Jack's particular contribution, aside from helping negotiate that [balanced-budget] agreement, was keeping things on track in the last years of the Clinton administration," Minarik said. "A lot of what Jack did was seeing to it that the discretionary side of the budget came in on target. When it got to the appropriations bills, we wound up with disputes that weren't so much over the totals as much as the priorities within the totals."

Lew's selection will also leave a hole at State. He was chosen to be the department's first deputy secretary for management and resources, a position Secretary of State Hillary Clinton elevated from the undersecretary level to give more clout to the nuts-and-bolts management of the department.