Biden economic picks show early shape of administration's pandemic agenda

President-elect Joe Biden’s choices to fill key economic positions in his administration telegraph a commitment to assembling a diverse brain trust tasked with supporting an economy struggling against a resurgence of Covid-19.

In addition to nominating former Federal Reserve Chair Janet Yellen as treasury secretary, Biden also nominated former Obama economics adviser Adewale “Wally” Adeyemo as deputy secretary of the Treasury. Adeyemo is currently president of the Obama Foundation.

Neera Tanden was nominated to head the Office of Management and Budget. Tanden is president and CEO of the Center for American Progress, a left-leaning think tank, and has a long history of working with Democratic administrations, including a stint as senior adviser for health reform under President Barack Obama.

Biden has also named labor economist Cecilia Rouse, dean of the Princeton School of Public and International Affairs, to chair the White House Council of Economic Advisers. Two longtime members of his economic inner circle, Jared Bernstein and Heather Boushey, will be Council members.

"By far, Biden's top two priorities are dealing with the pandemic and the economic consequences,” said Stephen Myrow, managing partner at Beacon Policy Advisors, a policy research consulting firm. “He’s first and foremost looking for people who have a certain amount of experience, and he has preference for people with whom he has a pre-existing working relationship.”

With this potential economic team, Biden is drawing a contrast both with President Donald Trump’s policies and, with his embrace of diversity, his ideological priorities. If confirmed by the Senate, Biden’s slate of nominees would comprise numerous firsts for women and minorities: Yellen would be the first woman to helm the Treasury Department and Adeyemo would be the first African American to serve as deputy secretary. Tanden would be the first woman of color — and the first South Asian American — to lead the Office of Management and Budget, and Rouse would be the first African American to lead the Council of Economic Advisers.

“There’s a huge priority on diversity and probably one that’s been long overdue at this level of government,” said Mark Hamrick, senior economic analyst at Bankrate.com. “In fielding a diverse set of opinions, ideally, one gets to better solutions."

The preponderance of labor economists did not go unnoticed by political observers, who said it telegraphed a key priority of the administration. “This is Scranton Joe,” Myrow said. “Labor is a key focus of his.”

With the last two weekly jobless reports showing a reversal in the slowing recovery of labor market, bringing back jobs will need to be a key priority for the incoming administration.

“The unemployment rate remains historically elevated,” Hamrick said. “It’s going to be key for this administration to target both cyclical and structural unemployment [because] both income and wealth inequality have been highly exacerbated by this downturn,” he said, with low-income minority populations bearing a disproportionate share of the economic pain.

In that context, it makes sense that Biden is choosing people with Obama-era experience. The Great Recession was an economic crisis precipitated by a financial crisis. The economy Biden and his team will inherit from Trump is teetering towards a downturn stemming from a protracted public health crisis. “Obviously, there are certain skills that come in crisis management. I think that’s where we go to the point about experience and pre-existing working relationships,” Myrow said.

Biden’s vision might be thwarted, though, if the GOP retains control of the Senate. While some of the nominees, such as Yellen, have a long history of being supported by lawmakers in both parties, observers say some of the other names could be harder to get confirmed.

Tanden, in particular, has emerged as a likely target for an early skirmish, observers say. “She’s a bit of a lightning rod,” Myrow said. “She’s tangled with a lot of the Republicans over the years,” he said, and she also drew ire for her 2016 support of Hillary Clinton from the left wing of the Democratic Party, which viewed that support as coming at the expenses of Clinton rival Bernie Sanders.

“The Republicans are going to want to take down someone, … She’s the one that’s most clearly in their sights,” Myrow said, since Tanden might have a slimmer margin of support than the other nominees.

“Biden’s deal-making ability could well be put to the test,” Hamrick said.

For the most part, though, these picks are viewed as safe, centrist and experienced — a roster that reflects Biden’s long tenure in Washington and his reputation as a consensus-builder.

The roles that have not been filled also are informative, experts say. An analysis by Beacon Policy Advisors of the economic advisers Biden leaned on during the campaign noted the left-leaning positions held by many in his inner circle. This has led to speculation that the economic positions for which the administration has not yet named appointees would skew more moderate.

“Cecilia Rouse is highly qualified, but the CEA post is largely symbolic," said Michael Munger, a professor of political science at Duke University. "The real economic advice will be coming from Brian Deese, from BlackRock."

Deese is currently a managing director and global head of sustainable investing at the investment behemoth, and was senior adviser for climate and energy policy in the Obama White House. He has not been officially named by the Biden team, although he was identified by The Wall Street Journal — citing unnamed sources — as a top contender to head Biden’s National Economic Council.

“Rouse can publicly take positions on diversity and inequality, and Deese can advise business as usual in the Oval Office,” Munger said.

By publicizing the more left-leaning names first, Biden might be seeking to head off discontent from the Democratic Party’s insurgent left flank. “In terms of progressives versus moderates, the CEA looks like it's a strong progressive base,” Myrow said. “Assuming Deese gets NEC, that’s going to be seen as perhaps more moderate.”

A calculation to mollify progressives first might pay off by defusing future objections to more centrist appointees.

“There is an economic crisis, and it is doubtful that the Democrats will have a majority in the Senate. Biden has to appeal to the center,” Munger said.