WASHINGTON - US President Barack Obama on Thursday nominated his chief of staff, Jack Lew, as the next Treasury secretary, praising him as a expert on the pressing national issues of spending cuts and deficit reduction.

Lew will succeed Timothy Geithner and take the lead on difficult negotiations with Congress on how to cut the nation's massive debt and rein in spending - a central challenge for Obama's second term.

President Barack Obama (L) listens as his Chief of Staff Jack Lew speaks after Obama nominated him to replace Timothy Geithner (R) as US Treasury Secretary, in the East Room of the White House in Washington, Jan 10, 2013. [Photo/Agencies]

Lew, a 57-year-old New Yorker who has previously served as White House budget chief, is likely to face tough questioning from Republicans in his Senate Finance Committee confirmation hearing after a bruising year-end battle over tax increases on the wealthy. He appears likely to win Senate confirmation.

Obama described Lew as "a low-key guy who prefers to surround himself with policy experts rather than television cameras, and said the son of a Polish immigrant had a deep belief in public service.

"Over the years, he's built a reputation as a master of policy who can work with members of both parties and forge principled compromises," Obama said.

Since the Treasury secretary signs US currency, Obama ribbed Lew for his unusually loopy signature and said the nominee had promised "to make at least one letter legible in order not to debase our currency."

Denis McDonough, Obama's deputy national security adviser, is the leading candidate to replace Lew as chief of staff.

Lew has experience in tough financial negotiations, having led talks with Congress in 2011 that brought a deal to avert a US debt default. As budget director for former President Bill Clinton, he presided over a string of budget surpluses between 1998 and 2000.

A similar battle looms now.

"For all the talk out there about deficit reduction, making sure our books are balanced, this is the guy who did it, three times," Obama said.

NEXT STEP: THE SENATE    

Lew's nomination now will be vetted by the Senate, where Senate Finance Chairman Max Baucus promised a "speedy but thorough" hearing. No date has yet been set.

"We must ensure Treasury has the leadership it needs as we tackle our country's pressing economic issues and work together to continue our recovery and create jobs," Baucus, a Montana Democrat, said in a statement.

Senator Orrin Hatch, the top Republican on the panel, said he plans to ask Lew about the administration's strategy for spending cuts, something Republicans have insisted needs to be made clear before they will agree to raise the debt ceiling.

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