A financier as budget director Franklin D. Raines: Vice-chairman of Fannie Mae succeeds Fed-bound Alice Rivlin.

April 18, 1996

HIS INITIALS are F.D.R. -- Franklin Delano Raines. As director of the Office of Management and Budget he will occupy the most powerful financial post in the federal government ever held by an African American. Every agency and department must run the OMB obstacle course before a presidential budget is submitted to Congress. Money is at stake, but so policy.

In moving from his $2.25 million-a-year post at the Federal National Mortgage Association to his $148,400 job at OMB, Mr. Raines did not blink. "You don't grow up with the initials F.D.R. without having some appreciation of the role, and the positive role, that government can play in the lives of people through this nation and throughout the world," he said.

The new budget chief has quite a resume: Graduate of Harvard College and Harvard Law; Rhodes scholar; a high OMB post in the Carter administration, Wall Street investor. He knows what he is getting into. He bucked common wisdom by saying there is still a "good" chance for a balance budget agreement. And while the fiscal 1996 budget has already been submitted, he would have undoubted clout in shaping a second Clinton term if the president is relected.

As Fannie Mae vice chairman, Mr. Raines helped direct more of its home mortgage guarantees for the benefit of minorities. "[This] is the largest public/private partnership in the world," he told Black Enterprise magazine, "and we do public sector work with private sector skills." Very lucrative skills. Forbes magazine has estimated that with the help of federal privileges, Fannie Mae has rewarded its stockholders: Anyone who invested $5,000 in April 1985, would have had shares worth $70,000 a decade later.

In choosing his third budget director, President Clinton picked a Wall Street financier to succeed Fed-bound economist Alice Rivlin, who in turn replaced politician Leon Panetta, now White House chief of staff. Mr. Raines should quickly apply his "private sector skills" to the public sector work of government.

Pub Date: 4/18/96

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