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Biden Fills Out Economic Team -- 3rd Update

11/29/2020 | 08:15pm EST

By Ken Thomas and Kate Davidson

WASHINGTON -- President-elect Joe Biden intends to nominate a team of liberal and centrist economic advisers to serve alongside planned Treasury Secretary nominee Janet Yellen, people familiar with his plans said Sunday, as he prepares to confront the economic fallout from the coronavirus pandemic.

Mr. Biden has chosen Neera Tanden, head of the Center for American Progress, a center-left think tank, to serve as director of the Office of Management and Budget. The former vice president has picked Cecilia Rouse, a Princeton University labor economist, to be chairwoman of the Council of Economic Advisers, these people said.

The president-elect has selected Adewale "Wally" Adeyemo, a former senior international economic adviser during the Obama administration, to serve as Ms. Yellen's top deputy at the Treasury Department. And he will turn to two campaign economic advisers, Jared Bernstein and Heather Boushey, to serve as members of the CEA alongside Ms. Rouse, the people said.

Mr. Biden's selections include outspoken advocates for aggressive fiscal stimulus to help return the economy quickly to its pre-pandemic health, a cause that could run into resistance in a closely divided Congress. The advisers are also known for advocating expanded government spending they say would boost the economy's long-term potential, in areas that are liberal priorities such as education, infrastructure and the green economy, and policy changes aimed at narrowing racial disparities in the economy.

Several of the choices, including Ms. Rouse, Mr. Bernstein and Mr. Adeyemo, are former Obama administration officials who played key roles in the aftermath of the financial crisis.

Some members of the economic team are likely to please party progressives. All three members of the CEA are known for their work giving greater prominence in policy debates to inequality. But others may draw some criticism from the left. Ms. Tanden has publicly tangled with allies of Vermont Sen. Bernie Sanders. Mr. Adeyemo has worked at BlackRock Inc., the world's largest asset manager, a potential red flag for some progressives opposed to any nominees with ties to Wall Street.

Many members of the new team have played down concerns about budget deficits, which have reached record levels over the past year, arguing that now isn't the time for policy makers to worry about rising deficits and debt, and that the risks of doing too little to support the economy are far greater than the risks of borrowing and spending too much. That marks a shift within the Democratic Party from Presidents Bill Clinton and Barack Obama, who both focused on deficit reduction.

Mr. Biden and Vice President-elect Kamala Harris are expected to introduce his key economic picks Tuesday in Wilmington, Del., as his incoming administration faces a challenging economic outlook with millions of Americans still seeking work and signs that job growth may be slowing heading into the winter.

One member of Mr. Biden's economic team isn't expected to be announced Tuesday: the head of his National Economic Council. He is considering Brian Deese, a former senior Obama administration official and a BlackRock executive, one of the people familiar with the discussions said. Another candidate is Roger Ferguson, chief executive of the Teachers Insurance and Annuity Association of America, the person said. Mr. Ferguson is a former vice chairman of the Federal Reserve and one of the nation's most prominent Black executives.

Mr. Biden on Sunday announced his White House senior communications team, an all-female seven-member group that includes Jen Psaki, a former Obama White House communications director, as his incoming White House press secretary, Kate Bedingfield as his communications director, and Symone Sanders as senior adviser and chief spokesperson for Ms. Harris.

Mr. Biden's economic team will face difficult decisions on how much the federal government should borrow and spend as the Covid-19 pandemic hangs over the economy. Growth has recovered faster than many economists expected, after widespread shutdowns aimed at slowing the spread of the virus triggered millions of layoffs and plunged the economy into a recession. There are recent signs, however, that momentum is slowing as new virus cases surge and job growth slows, and much of the aid lawmakers passed earlier this year has run out. JPMorgan Chase & Co. economists said in November that they expect the economy to shrink in the first quarter of 2021.

Mr. Biden campaigned on a platform that centered around raising taxes on corporations, capital gains and households earning more than $400,000 but he will face stiff opposition from Republicans who could win a narrow Senate majority if they prevail in at least one of two runoff elections in Georgia in January.

Just as he did with his foreign-policy announcements, Mr. Biden appears to be planning to package his economic team as much for their gender and racial diversity and their personal stories as on their economic record. The former vice president frequently speaks about the economy through stories of his upbringing and his father's financial struggles.

Ms. Yellen, who was named by President Obama as the first woman to chair the Federal Reserve, would be the first woman to lead the Treasury Department. Mr. Adeyemo, who as a child emigrated to the U.S. from Nigeria with his family, would be the department's first Black deputy secretary. Ms. Rouse would be the first woman of color to chair the council while Ms. Tanden would be the first woman of color and the first South Asian woman to oversee OMB.

Mr. Biden said earlier in November that his choice for Treasury secretary would be broadly supported by the liberal and moderate wings of the Democratic Party. Ms. Yellen has been praised by liberals such as Massachusetts Sen. Elizabeth Warren and she won Senate confirmation as Fed chair in 2014 with the help of nearly a dozen Republicans.

Some of Mr. Biden's choices could face scrutiny from Republicans as well as liberals within his party who have warned that "personnel is policy" and have criticized the potential for revolving-door moves between industry and government.

Mr. Adeyemo, who has served since 2019 as president of the foundation of former President Obama, worked as a senior adviser for BlackRock from 2017 to 2019, including as interim chief of staff to Larry Fink, the company's chief executive and chairman.

Ms. Tanden is a former adviser to Hillary Clinton, who won the 2016 Democratic presidential nomination after a bitter contest with Mr. Sanders. During Mr. Obama's administration, Ms. Tanden was one of the architects of the Affordable Care Act, which Republicans have repeatedly sought to repeal.

Ms. Rouse, who is well-known for her work on the economics of education, served as a CEA member during the first two years of the Obama administration, helping develop policies to encourage employers to boost hiring and arguing for more fiscal stimulus to aid the recovery following the 2007-09 recession. She also served on the National Economic Council during the Clinton administration.

Ms. Rouse has written on the benefits of attending community college, and argued that the use of school vouchers doesn't greatly improve student achievement. She is also known for a 1997 paper on discrimination, in which she and her co-author, Harvard economist Claudia Goldin, found that female musicians were several times more likely to be hired by an orchestra when the auditions were "blind," and musicians performed behind a curtain.

Ms. Boushey and Mr. Bernstein were among a group of rotating advisers who participated in daily economic briefings for Mr. Biden as the coronavirus pandemic unfolded earlier this year.

Ms. Boushey is the president and CEO of the Washington Center for Equitable Growth, a nonprofit research organization she co-founded in 2013 to give greater prominence in economics to the links between inequality and growth. She served as the chief economist for Mrs. Clinton's 2016 presidential transition team.

Ms. Boushey has called on Congress to tie additional pandemic relief to economic conditions such as the unemployment rate, linking aid directly to government data and insulating it from lawmaker discretion, a proposal designed to ensure that programs such as enhanced jobless benefits would remain available until the economy improves. She also has warned that failure to address longstanding inequality could lead to a slower, uneven economic recovery.

She has written about the effect of children on women's labor-force participation, and how policy makers and businesses can better support workers with caregiver responsibilities, and in turn promote economic growth.

Mr. Bernstein, who served as chief economist to Mr. Biden when he was vice president, has been a senior fellow at the left-leaning Center on Budget and Policy Priorities since 2011.

He has been an advocate for more federal spending to combat the coronavirus, arguing that low interest rates and inflation mean the government has plenty of capacity to borrow to fight the pandemic and stimulate the economy. He has warned that pulling back spending too soon to curb deficits would be a mistake, and could lead to a slow, lackluster recovery similar to the years following the last recession.

Mr. Bernstein was a key architect of the Obama administration's roughly $800 billion package enacted in the first few months of 2009 to stimulate the economy in the wake of the financial crisis.

As protests flared up over the summer on racial inequality, Mr. Bernstein co-wrote a paper urging the Federal Reserve to expand its focus and look beyond the overall labor market to target the Black unemployment rate specifically. Mr. Biden's campaign later endorsed that idea.

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11-29-20 2014ET

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