What Biden’s New Economic Team Says About His Agenda

By Yuval Rosenberg

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.

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