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President Obama with Orszag, Rahm Emanuel, and Robert Gibbs last June.   

Orszag expresses an easy calm despite the criticism of his recent move to Citi. At the White House, Orszag was known for his supreme self-confidence. “So far so good,” he said breezily, over a grilled-chicken salad, when I asked how he liked his new life as an investment banker. He was adjusting quite well to life in New York. He moved into a big new apartment downtown with his new wife, ABC News correspondent Bianna Golodryga, and was up at dawn with the type-A crowd for morning runs along the West Side Highway. Before our lunch, Orszag had just flown in from London, where he had been meeting with Citi’s managing directors and president and chief operating officer John Havens.

As we spoke, Orszag made clear he understood that by joining Citi, he was stepping into a white-hot center of populist animus. “Look, I faced a fundamental choice,” he said. “I could have been totally comfortable doing something easy, going back to academe or a think tank, giving speeches, having a cushy consulting thing—ironically, which would have played off my White House experience much more than what I chose to do. Or I could have done something new, which would be harder.”

Orszag’s comfort in his new job may have something to do with the relief he feels at being out of the White House. By last summer, Orszag’s relations with Rahm Emanuel and others had soured—badly. Depending on whose spin you believe, Orszag quit over principle, telling friends he was upset by Washington’s refusal to get serious about the deficit. A less favorable view is that Orszag was marginalized by Emanuel and David Axelrod. “He was accused of leaking and being disloyal,” said one Democrat close to the players. “The press loved Peter, which was part of the reason why the White House didn’t love him.”

His falling-out with the White House was a dramatic reversal for Orszag, his first real career stumble. Looking back, Orszag now says he didn’t even want the job. “I didn’t want to do it,” he told me. “Having worked in a White House before, I knew how the infighting can become all-­consuming, and I didn’t want to fall into that trap again. Many of my mentors warned me that despite the ‘no drama’ Obama campaign, once in office this White House would inevitably be like others—and possibly worse. And unfortunately that’s exactly what happened.”

Orszag took the OMB job after both Emanuel and Obama personally lobbied him to accept. (When a president asks you to serve, you do it, Orszag told me.) He was initially one of the most visible faces on Team Obama. During his first year in office, he made the rounds on Charlie Rose, Face the Nation, and The Daily Show. As the youngest member of Obama’s Cabinet, Orszag played the part of the rock-star egghead, donning cowboy boots under his navy suits and becoming something of an unlikely hunk, embodying everything that was cool about the technocratic braininess of Obama’s Washington.

All this public attention gave Orszag juice: He transformed the wonky Office of Management and Budget into a power center on the West Wing’s fiercely competitive economics team. He plunged into the intense debates over the $800 billion stimulus and was also a major player in the health-care fight. Orszag was a deficit hawk and clashed with Larry Summers, who wasn’t as focused on the long-term debt crisis. Orszag argued that some of the biggest things the White House could do to tame the deficit were to tackle health care and repeal all of the Bush tax cuts. True to his Rubinesque roots, Orszag lobbied for the deficit commission; Summers was against it, telling aides that the commission posed “McChrystal risk,” because its findings could box Obama into a corner, the way the former general’s leaked report about boosting troop levels in Afghanistan did.

Orszag, who had run his own team at the Congressional Budget Office, didn’t always defer to Summers, and at one meeting, the pair reportedly fought over a chair across from Obama. “Peter was somebody who could be a foil to Larry. He suffered from a small case of Summers-itis, where you display your brilliance,” one budget-policy wonk who has worked with both men explains.

Orszag’s public profile, once one of his biggest assets, became a liability. In January, a “Page Six” headline blared, “White House Budget Director Ditched Pregnant Girlfriend for ABC News Gal.” The tabloid detailed how Orszag had split with his pregnant girlfriend, the Greek shipping heiress Claire Milonas, and taken up with the younger Golodryga. The baby drama was not well received by the no-drama Obama administration. Seven months later, Orszag was out. His departure did not end his problems with the White House.