A Team of Rivals? Not Quite.
“To me it appears evident that an executive ministry composed of men with the qualifications I have described would speedily restore the credit of government abroad and at home, would induce our allies to greater exertions in our behalf, would inspire confidence in monied men in Europe as well as in America to lend us ⟨those⟩ sums of which it may be demonstrated we ⟨stand⟩ in need from the disproportion of our national wealth to the expenses of the War.”
Alexander Hamilton wrote those words in April 1781. He was, at that point, still about eight years from the start of his tenure as the first U.S. Treasury secretary, but already he was thinking about the finances of the nation. In that letter, he also outlined arguments for a national bank.
As Department of the Treasury historians note, Hamilton was a strong supporter of a powerful Treasury and, as such, “designed” an agency not only “for the collection and disbursing of public revenue, but also for the promotion of the economic development of the country.” That mission stands today, and it could grow even stronger under the next administration.
President-elect Joe Biden already has made history by naming Janet Yellen, the first woman to lead the Federal Reserve, as his nominee for Treasury secretary. If confirmed, she would become the 76th U.S. Treasury secretary and the first woman to hold that position.
What can we expect of Yellen and the other officials who will fill out the Biden economic team?
Before answering that question, let’s look at the individuals the president-elect will turn to run the country’s finances and economic policy. Fortune has provided a look at the backgrounds, and responsibilities, of the chosen seven.
First, of course, there is Yellen, a labor economist by trade. She became chair of the Federal Reserve in 2014 and prior to that was vice-chair and a member of the Board of Governors. She was president of the San Francisco Fed for six years and served as chair of the Council of Economic Advisers during the Clinton administration. Yellen currently is a distinguished fellow at the Brookings Institution and a professor emeritus at Haas School of Business at the University of California, Berkeley.
Yellen is widely respected and already has won praise from Republican senators Chuck Grassley and John Cornyn and from Larry Kudlow, one of President Donald Trump’s chief economic advisers. As Fortune explains, Yellen “will have a say in everything from climate change prevention to tax policy to stimulus spending.”
In other words, her role will be even more expansive than perhaps even Hamilton envisioned.
President-elect Biden already has announced his choice for Yellen’s primary lieutenant: he wants Wally Adeyemo to serve as deputy Treasury secretary. Adeyemo is an attorney who served as a senior adviser at the Treasury Department during the Obama administration and then as the agency’s chief of staff. He also served as chief of staff at the Consumer Financial Protection Bureau when it was first being implemented under now-Sen. Elizabeth Warren (D-Mass.). After President Barack Obama left office, Adeyemo became president of the Obama Foundation and also was a senior adviser and chief of staff at BlackRock, the world’s largest asset manager.
Adeyemo is likely to focus on international trade when he lands at Treasury. Fortune noted he supports “open trade with China” and “helped craft the since rejected Trans-Pacific Partnership proposal.”
Moving to the White House, President-elect Biden has chosen Brian Deese to lead the National Economic Council (NEC). Deese would come into the White House with significant experience in post-recession rebuilding. As Fortune explained, he orchestrated the 2009 bailout of the auto industry. He was both deputy director of the NEC and acting head of the Office of Management and Budget during the Obama administration. Like Adeyemo, Deese also worked for BlackRock. (Watch for this fact to come up at confirmation hearings. It is a major point of contention for progressives who are wary of Wall Street.)
As The Wall Street Journal explained, the NEC “helps coordinate and formulate policy across federal agencies.” It is one of two powerful economic bodies within the White House structure. The other is the Council of Economic Advisers, or CEA.
Cecilia Rouse is Biden’s choice to be chair of the CEA, and Biden has said he will elevate this position to be part of the cabinet. The Journal explained the CEA “acts as an internal White House think tank, evaluating the costs and benefits of administration proposals.”
Rouse currently is dean of the Princeton School of Public and International Affairs, but served on President Bill Clinton’s National Economic Council and then on President Barack Obama’s Council of Economic Advisers. She is an expert in the “economics of education” and, given Biden’s remarks yesterday outlining his plan to reopen schools in the first 100 days of his administration, we should expect Rouse to be deeply involved in that effort.
If confirmed by the Senate, Adeyemo would be the first Black deputy secretary of the Treasury and Rouse would be the first Black CEA chair. Filling out the rest of the CEA will be Heather Boushey and Jared Bernstein.
Boushey currently is president and CEO of the Washington Center for Equitable Growth. She previously was an economist for the Center for American Progress, the congressional Joint Economic Committee, the Center for Economic and Policy Research, and the Economic Policy Institute. Fortune noted “Boushey runs in a small circle with Bernstein, Yellen, and other progressive economists who believe that expanding social safety net programs to help the poor and middle class will improve the economy overall. In her research and work.” Boushey also “has focused on the importance of the family unit and support for working mothers, something that will likely continue in the White House.”
Bernstein served as Biden’s top economic adviser when he was vice president. He is now a senior fellow at a progressive think tank called the Center on Budget and Policy Priorities. Fortune noted he is a supporter of “both a wealth tax and a jobs guarantee,” policies that are supported by Biden’s former rival Sen. Bernie Sanders (I-Vt.). He is likely to try to pull the administration leftward.
That statement also is true of President-elect Biden’s pick to lead the Office of Management and Budget (OMB): Neera Tanden. The OMB oversees the development and implementation of the federal budget. With visibility into every policy issue, the agency is one of the most powerful agencies in the U.S. government, even if it one of the least known.
Tanden is probably Biden’s most controversial pick and she will face significant Republican opposition on Capitol Hill, in part because of her progressive views, but also because of her vocal criticism of the GOP on social media. During the Obama administration, Tanden served at the U.S. Department of Health and Human Services where she helped develop the Affordable Care Act. She was an adviser to Hillary Clinton’s 2016 presidential campaign and now leads the progressive think tank Center for American Progress.
How do the priorities of these seven individuals align?
Very well. The immediate focus, it seems, will be three-fold: enacting a robust pandemic stimulus bill, reducing income inequality, and addressing labor issues.
According to Fortune, Treasury nominee Yellen has made it clear her first order of business is “a large stimulus package.” In Delaware, Joe Biden’s home state, Yellen recently said, “Lost lives, lost jobs. Small businesses struggling to stay alive are closed for good. So many people struggling to put food on the table and pay bills and rent. It’s an American tragedy … And it is essential we move with urgency. Inaction will produce a self-reinforcing downturn causing yet more devastation.”
Yellen’s potential deputy, Adeyemo, said he will focus on “bolstering America’s middle class and reducing income inequality.” According to The New York Times, OMB pick Tanden has said, rising income inequality is the consequence of “decades of conservative attacks on workers’ right to organize” and that labor unions “are a powerful vehicle to move workers into the middle class and keep them there.”
Rouse, the president-elect’s pick to head the Council of Economic Advisers, has indicated she will focus on short-term pandemic-related issues and longer-term economic shifts toward a gig economy.
As the British newspaper The Guardian noted, Biden’s advisers will face a “historic challenge” in the form of an economy beset by a staggering national debt, job growth that is slowing sharply, long-term unemployment that is expanding rapidly, and “people of color [who] are still suffering hardship at far higher levels than white Americans.”
Despite the challenges, these advisers will have at least one advantage over Hamilton and his contemporaries: proximity. According to historians at Thomas Jefferson’s Monticello, it took two and a half years for President George Washington to assemble the four men who formed his cabinet into one room. And then the deliberations were met with personal tension and ideological disagreement – mainly due to Hamilton and Jefferson’s differing views on how much power policymakers in Washington, D.C. should have.
President Biden’s top economic advisers, at least, are a bit more uniform in their view of the size and role of the federal government. The first cabinet meeting will be historic, but don’t expect rivalries or much dissension.