Lael Brainard, vice chair of the US Federal Reserve, speaks during an Urban Institute panel discussion in Washington, D.C., US, on Friday, June 3, 2022.
Ting Shen | Bloomberg | Getty Images
The White House has tapped Federal Reserve Vice Chair Lael Brainard to steer the National Economic Council and Jared Bernstein to go the Council of Economic Advisors, two critical roles for shaping U.S. economic policy because the country grapples with persistently high inflation.
The announcement is the newest in a series of staff shakeups within the administration after the midterms and halfway through Biden’s term as he begins to look toward a possible re-election bid. In recent weeks, Jeff Zients has replaced Ron Klain as White House chief of staff. Current NEC director Brian Deese announced he was stepping down and on Friday. Kate Bedingfield, White House communications director, said she plans to depart at the tip of the month.
“Cecilia Rouse and Brian Deese are trusted advisors that I actually have relied on to assist craft my economic agenda, and our country owes them a debt of gratitude for his or her service,” Biden said in a press release. “As they transition out of the White House, I’m pleased to announce recent leaders who will proceed to deliver on my economic vision and help finish the job.”
CNBC reported earlier this month that Brainard and Bernstein were being considered for the positions, and in January that Brainard was a top contender for the job.
The pair can have tremendous influence over economic policy at a tough time for the US. Unemployment is at a near-54 12 months low while GDP data shows robust growth, but the info is paired with inflation at a four-decade high and aggressive rate of interest hikes to contain consumer prices. The Federal Reserve has raised rates eight times during the last 12 months, upping the benchmark rate from effectively zero a 12 months ago to a goal range of 4.5% to 4.75%, the best since October 2007.
In a press release announcing the choice, Biden called Brainard “one among the country’s leading macroeconomists.”
“She is a trusted veteran across our economic institutions, and understands how the economy affects on a regular basis people,” he said.
Brainard will help lead Biden’s negotiations with House Republicans in what guarantees to be a contentious and tricky fight over raising the U.S. debt ceiling later this 12 months. The White House had drawn a tough line on the matter, saying it won’t negotiate over the critical funding move, while the GOP has insisted on reducing spending to win its backing.
Brainard has been floated as a possible Treasury secretary or as a alternative for Federal Reserve Chair Jerome Powell. She currently serves as Powell’s vice chair. Her appointment would help burnish ties between the West Wing and the Treasury Department, which at times have been at loggerheads on policy, people accustomed to the matter say. Brainard served with Treasury Secretary Janet Yellen on the Fed together for 3 years. She also served as under secretary of the Treasury from 2009 to 2013 and held deputy NEC roles.
Yellen has said she intends to stay on the Treasury until the tip of Biden’s term.
Brainard is referred to as a tricky critic of Wall Street, opposing proposals to lift regulations created within the wake of the Great Recession. She’s also discussed the effect climate change is having on the financial sector. As NEC director, Brainard will probably be tasked with crafting the president’s economic agenda and coordinating economic responses between various agencies.
The position of NEC director is seen as a stepping stone to other top Cabinet roles. Robert Rubin, who ran NEC from 1993 to 1995, was later appointed Treasury secretary by then-President Bill Clinton. Larry Summers, who succeeded Rubin at Treasury, took the reverse path: he returned to government to run the National Economic Council in 2009 for former President Barack Obama.
Bernstein, a former social employee and longtime Biden ally who served as his chief economist and economic advisor throughout the Obama administration, is currently a member of the board he’ll helm.
“Jared is an excellent thinker and one among my closest and longest-serving economic advisers,” Biden said. “He’s an authority on employee empowerment and a worker-centric economic policy, which has long been the guts of my economic vision.”
Bernstein’s position requires Senate confirmation, which isn’t expected to be difficult with the Democrats’ 51-seat majority.
