The news that Peter Orszag will leave the OMB in July is not surprising; he was set to leave in April but was persuaded to stay on a bit longer. Orszag will be remembered chiefly for two things: his key role in designing the stimulus and the new health care law and his odd status as the Justin Bieber of the executive branch, the wonk whose personal life was splashed all over the tabloids. Orszag's true legacy won't be established for years, of course, not until his ideas about how to "bend the cost curve" of health care expenditures--many of which were crammed into the new law--have been tested in the real world.
It probably won't get much attention, but Orszag deserves particular credit for OMB's performance in the early days of the administration. It's a somewhat obscure, "how government works" point, but OMB is often most valuable to the White House during transition years between administrations because it has a large staff of expert bureaucrats that doesn't turn over the way that, for instance, the Treasury Department's does (and 18 months into the administration, many Treasury posts are still vacant). This was particularly important when Obama took office, given the scale of the economic crisis and the imperative to pass a major stimulus. Orszag's leadership of OMB during this period is an underappreciated accomplishment.
So who will succeed him? My guess is Laura Tyson, the UC-Berkeley economist, for all the obvious reasons: she's well-qualified, served as an economic principal in the Clinton Administration, and would be a good economic spokesman (Obama sure needs one). It also doesn't hurt that she's a woman. Another likely successor is Gene Sperling, who was once Orszag's boss and has been rumored to be headed from Treasury to OMB for many months now. My dark horse candidate is Jim Leach, the former Republican congressman from Iowa, deficit hawk, and currently the head of the National Endowment for the Humanities. Putting a Republican like Leach in charge of OMB would be an intriguing move, since it would signal Obama's determination to cut the deficit and make it a bit harder for the GOP to criticize his efforts.
UPDATE: Brad DeLong points out (in his gentle way) that Jim Leach can hardly be considered a deficit hawk:
Leach voted for the 1981 and 2001 tax cuts, for the 2003 Medicare Part D expansion, and against the 1993 deficit reduction. His claims to be a deficit hawk rest on one vote and one vote only: his vote against the 2003 tax cut.
DeLong is right--I was thinking mainly of Leach's 2003 vote. And that ain't much. I plead guilty to defining deficit hawkishness down. But in my own defense, Leach does look like a hawk compared to most of his Republican colleagues...