Discuss as:

White House taps former budget chief for OMB

President Barack Obama has announced his nominee to replace departing Office of Management and Budget director Peter Orszag, naming Clinton-era budget chief Jacob (“Jack”) Lew.

Lew, who filled the same post for which he’s now been tapped by Obama from 1998-2001, currently serves as the Deputy Secretary of State for Management and Resources and is a top advisor to Secretary Hillary Clinton.

In a letter to State Department staff, Clinton said that news of Lew's departure is "obviously bittersweet."

"While I was hoping never to have to replace Jack, the President and our country need his leadership at OMB," she wrote. "His prior experience in the Clinton Administration helping to take America's budget from deficit to surplus makes him uniquely prepared to lead at this time."

Orszag, who has served as OMB director since the beginning of Obama’s presidency, announced his departure last month. He will join the Council on Foreign Relations as a visiting fellow.

***UPDATE*** Formally announcing the decision at the White House, Obama noted that Lew was the only OMB director in U.S. history to preside over budget surpluses for three consecutive years.

"If there was an OMB Hall of Fame," he said, "Jack Lew surely would have earned a place" in it.

After mentioning Lew's tenure at the State Department, Obama quipped that he had to negotiate with Secretary Clinton to lure him away for the new post. "I had to trade number one draft picks to get Jack back at OMB," he said.

NBC's Courtney Kube contributed reporting.