What Biden’s Economic Team Signals About His Plans
President-elect Joe Biden on Monday announced his picks for top members of his economic team, with choices that signal a strong focus on providing relief for a Covid-stricken economy and help for the labor market — and likely less of an emphasis on deficit reduction, at least in the near term. Combined with Biden’s announcement of an all-female senior communications team, Biden’s picks also indicate the incoming administration’s attention to racial and gender diversity.
The choices formally announced include:
Janet Yellen for Treasury secretary. Yellen, the former Federal Reserve chair and director of the White House Council of Economic Advisers under President Bill Clinton. If confirmed, Yellen would be the first woman to run the Treasury Department in its 231-year history. "We face great challenges as a country right now," Yellen said on Twitter. "To recover, we must restore the American dream—a society where each person can rise to their potential and dream even bigger for their children. As Treasury Secretary, I will work every day towards rebuilding that dream for all."
Adewale "Wally" Ademeyo as deputy Treasury secretary. Adeyemo, president of the Obama Foundation and former senior adviser at Wall Street giant BlackRock, has also served as deputy director of the National Economic Council, deputy national security advisor, and as the first chief of staff of the Consumer Financial Protection Bureau. He would be the first Black deputy Treasury secretary.
Cecilia Rouse, a Princeton labor economist, to head the Council of Economic Advisers. Rouse was on President Obama’s Council of Economic Advisers from 2009 to 2011 and worked at the National Economic Council during the Clinton administration. She would be the first Black woman to lead the Council.
Jared Bernstein as a member of the Council of Economic Advisers. Bernstein, an adviser to the Biden campaign and senior fellow at the Center on Budget and Policy Priorities, was chief economist to then-Vice President Biden during the Obama administration.
Heather Boushey as a member of the Council of Economic Advisers. Boushey is president and CEO of the Washington Center for Equitable Growth, a liberal think tank focused on inequality, which she co-founded. She was also an adviser to the Biden campaign. "Both Ms. Boushey and Mr. Bernstein come from a liberal, labor-oriented school of economics that views rising inequality as a threat to the economy and emphasizes government efforts to support and empower workers," The New York Times reports.
Neera Tanden, head of the Center for American Progress, a liberal think tank, to lead the Office of Management and Budget. Tanden, who was an advisor to Hillary Clinton, would be the first Indian-American and first woman of color in the job. "After my parents were divorced when I was young, my mother relied on public food and housing programs to get by," Tanden tweeted Monday. "Now, I’m being nominated to help ensure those programs are secure, and ensure families like mine can live with dignity. I am beyond honored."
Biden has reportedly also chosen Brian Deese, an executive at BlackRock and former Obama administration economic adviser, to head the National Economic Council, though that announcement may come later in the week.
Signaling Biden’s economic priorities: The announcement from Biden’s transition team underscored that the incoming administration will prioritize recovery from the pandemic and plans to focus on driving up wages while driving down unemployment and inequality.
The team "will help the communities hardest hit by COVID-19 and address the structural inequities in our economy," Biden said in the statement. "They will work tirelessly to ensure every American enjoys a fair return for their work and an equal chance to get ahead, and that our businesses can thrive and outcompete the rest of the world."
That’s likely to mean a pursuit of additional stimulus and federal spending. "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," Ken Thomas and Kate Davidson write at The Wall Street Journal. "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."
Many of Biden’s nominees have explicitly called for deficit spending to address the pandemic and its economic effects. Boushey and Tanden were among the authors of a recent commentary titled "Deficit and Debt Shouldn’t Factor Into Coronavirus Recession Response." And Yellen has made clear in congressional testimony and published op-eds that she firmly believes debt and deficit concerns should take a back seat to a more robust pandemic response. (For more on their approach to debt and deficits, see this piece in The New York Times.)
A fight ahead? Biden’s picks require Senate confirmation, and Tanden — known as an outspoken critic of President Trump and some others in the GOP — has already faced some backlash from Republicans who say she is too political and too progressive, even as she has in the past also clashed with some on the left.
"I think, in light of her combative and insulting comments about many members of the Senate, mainly on our side of the aisle, that it creates certainly a problematic path," Sen. John Cornyn (R-TX) said Monday. Drew Brandewie, a spokesperson for Cornyn, said she "stands zero chance of being confirmed" (the statement assumes Republicans will keep control of the Senate by holding onto at least one if not both Georgia Senate seats headed for a January 5 runoff election).
Even before the nominations were formally announced, Sen. Tom Cotton (R-AR) slammed Tanden as a "partisan hack." And Josh Holmes, former chief of staff to Senate Majority Leader Mitch McConnell (R-KY) called her selection a "sacrifice to the confirmation gods," suggesting that her nomination may have been set up to fail so that other nominees would be more easily confirmed.
Biden is unlikely to have intended that, potentially setting up a clash over a key nomination.
Long Agenda, Little Time in Washington
Lame-duck lawmakers returned to Washington this week with some major issues on their plate but just a few legislative days left to address them.
Most pressingly, a short-term agreement to fund the government expires on December 11, leaving Congress less than two weeks to either pass an omnibus spending package or agree on another stopgap resolution to keep the doors open through early next year. Democratic and Republican negotiators have agreed to topline numbers on a full-year, $1.4 trillion omnibus bill, but the details still need to be hammered out. Potentially problematic issues include money for President Trump’s border wall, abortion funding and the renaming of military bases that honor Confederate leaders.
Additional spending for Covid-19 relief and economic stimulus provides another potential hurdle. House Speaker Nancy Pelosi (D-CA) and McConnell remain miles apart on a comprehensive package, and there’s little hope that one would pass before the new year, but some relief spending could be added to a government funding bill. Emergency unemployment programs that expire at the end of December could be renewed, as could a small business loan program. Other possibilities include funding for vaccines and extensions of the student loan payment moratorium, eviction protections and paid family leave benefits.
Gaveling the Senate into session Monday, McConnell said his agenda included funding the government, finishing the annual defense authorization bill and confirming judges to the federal bench. The Senate leader said he saw no reason not to pass another pandemic relief package in what appears to be "the last chapter of this battle," with funds for vaccine distribution, small business loans and unemployment assistance. McConnell also blamed "obstruction" by Democrats for the failure to pass a new aid package thus far.
Senators talk relief: A bipartisan group of senators is trying to revive talks about the next coronavirus relief package, Politico’s Burgess Everett reports. "There are several groups of discussions," Everett says. "Among the senators involved in them are Chris Coons (D-Del.), Joe Manchin (D-W.Va.), Mitt Romney (R-Utah), Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Mark Warner (D-Va.), Rob Portman (R-Ohio), Bill Cassidy (R-La.), Jeanne Shaheen (D-N.H.) and Michael Bennet (D-Colo.) .... Senate Minority Whip Dick Durbin has also been involved in some discussion."
There are no guarantees that the talks will lead to anything, of course, and few signs so far of compromise on the key issue of spending levels.
Jobless Numbers Are Flawed, and Millions May Have Been Shortchanged: Report
The weekly unemployment reports from the Labor Department are "flawed," according to a government watchdog, providing an inaccurate picture of the number of people who are unemployed and receiving benefits at any given time.
In a report issued Monday, the Government Accountability Office said that the weekly unemployment statistics have been distorted by processing delays, double-counting, fraud and inconsistency of reporting across states. Backlogs of claims have been particularly problematic, the GAO said, inflating numbers as states struggle to handle an avalanche of paperwork that in some cases dates backs weeks and months.
In ordinary times, weekly initial jobless claims serve as a pretty good estimate for layoffs and the number of newly unemployed people, GAO said. But the millions of job losses produced by the coronavirus pandemic have overwhelmed state unemployment offices, breaking the link between actual layoffs and claims processing. "[D]ue to state backlogs in processing claims and other data issues, these traditional estimates are not appropriate in the context of the pandemic," GAO said. "For example, state backlogs in processing claims led to individuals submitting claims for multiple weeks of retroactive benefits during single reporting periods. So, by using claims counts to represent the number of people, many individuals are counted more than once in DOL’s estimate."
Inconsistency in individual state reporting has also led to distortions. In one example provided by GAO, the state of Arizona failed to report data for claims within the Pandemic Unemployment Assistance program for the week ending July 23, 2020, due to concerns about fraud. Had it reported, the Labor Department would have likely shown a "significant increase" in participation in unemployment programs nationally for that week, rather than a decrease.
In response to the GAO analysis, the Labor Department said "it plans to clarify in its weekly news releases that the numbers it reports for weeks of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits." The department does not plan to revise its already-issued reports, however, due to both time constraints and the fact that many of the emergency unemployment programs passed by Congress at the beginning of the pandemic are scheduled to end next month.
Shortchanging payments: In addition to flawed statistics, the GAO found that many states were underpaying certain unemployment benefits. A majority of states have been paying the minimum amount in the temporary Pandemic Unemployment Assistance program — which aids workers who are usually excluded from unemployment insurance systems, including self-employed and gig workers — rather than the amount they are entitled to based on previous earnings. As a result, millions of households may have fallen below the poverty level after the Federal Pandemic Unemployment Compensation program, which provided an additional $600 in unemployment benefits, expired at the end of July.
- Biden’s Economic Picks Suggest Focus on Workers and Income Equality – Jim Tankersley et al, New York Times
- The US Economy Needs a Booster Shot – Laura Tyson and Lenny Mendonca, Project Syndicate
- How Much Debt Is Too Much? – Raghuram G. Rajan, Project Syndicate
- What Is Joe Biden Thinking, Nominating Neera Tanden? – Jim Geraghty, National Review
- Joe Biden Seems to Be on Board With This Blog's First Rule of Economics: F*ck The Deficit. People Got No Jobs. – Charles P. Pierce, Esquire
- What Changes After Covid-19? I’m Betting on Everything. – Megan McArdle, Washington Post
- Trump’s Legacy, by the Numbers – Catherine Rampell, Washington Post
- Virus Shouldn’t Be Sole Focus for Biden Economic Aide – Michael R. Strain, Bloomberg
- Joe Biden Has Problems. The World Has Solutions – John Micklethwait and Adrian Wooldridge, Bloomberg
Key Questions Biden Will Need to Answer About His First-Time Down Payment Tax Credit – C. Eugene Steuerle, Tax Policy Center
- A Leaderless America Slips Deep Into a Grim Pandemic Winter – Stephen Collinson, CNN
- Like Trump, Biden Is Transactional. That’s Not a Bad Thing – Karl W. Smith, Bloomberg