From NBC's Athena Jones
WASHINGTON, DC, JULY 13 -- In naming Jacob Lew as his pick for director of the Office of Management and Budget, President Obama selected the only head of that office in history to have presided over a budget surplus for three consecutive years.

Lew would replace Peter Orszag, who is set to leave his post later this summer. He must be confirmed by Congress.

Lew currently serves as deputy secretary of state for management and resources, previously served as executive vice president and chief operating officer of New York University and helped design the national service program Americorps. He was also OMB director under former President Clinton. Obama praised his work then, noting that the Clinton administration left office with a $236 billion budget surplus.

"If there was a hall of fame for budget directors, then Jack Lew surely would have earned a place for his service in that role under Clinton," the president said.

Deficit reduction has become an important topic as the economy slowly pulls out of the worst recession since the 1930s, with some saying its time for the government to rein in spending and others calling for more government outlays to solidify the recent gains and prevent a "double dip" recession as states and municipalities struggle with budget shortfalls and private sector hiring remains slow. The president has established a bipartisan commission to look at ways to reduce the deficit. Its recommendations are not due until after the midterm elections this fall.

In praising the outgoing Orszag, the president noted that he had held his position at a particularly tough and demanding time because when Obama took office the country was facing not only the worst economic crisis since the Great Depression but also a $1.3 trillion deficit cause by the recession and "nearly a decade of not playing for key policies and programs."

"Jack's challenge over the next few years is to use his extraordinary skill and experience to cut down that deficit and put our nation back on a fiscally responsible path," Obama said. "And I have the utmost faith in his ability to achieve this goal as a central member of our economic team."

Before his remarks in the Diplomatic Reception Room at the White House, the president hailed what he called a "breakthrough" that has moved the Senate one step closer to passing the financial regulatory reform bill. With the help of three Republicans -- Sens. Olympia Snowe and Susan Collins from Maine and Massachusetts Sen. Scott Brown -- Democrats in the Senate now have the 60 votes needed to pass the legislation.

"Three Republican senators have put politics and partisanship aside to support this reform and I'm grateful for their decision as well as all the Democrats who've worked so hard to make this reform a reality," Obama said. "I urge the Senate to act quickly so that I can sign it into law next week."