Biden faucets Brainard, Fed’s Bernstein for high jobs in financial system as a part of White Home restructuring
Lael Brainard, Vice Chair of the Federal Reserve, speaks during a panel discussion at the Urban Institute in Washington, DC, U.S., on Friday, June 3, 2022.
Ting Shen | Bloomberg | Getty Images
The White House has appointed Federal Reserve Vice Chairwoman Lael Brainard to head the National Economic Council and Jared Bernstein to head the Council of Economic Advisors, two critical roles in shaping U.S. economic policy as the country struggles with is struggling with persistently high inflation.
The announcement is the latest in a series of administration reshuffles following the midterm and midpoint of Biden’s tenure, as he begins to address 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 his resignation on Friday. Kate Bedingfield, White House communications director, said she plans to leave by the end of the month.
“Cecilia Rouse and Brian Deese are trusted advisors whom I have relied on to shape my economic agenda, and our country owes them a debt of gratitude for their service,” Biden said in a statement. “As they exit the White House, I am pleased to announce new leaders who will continue to realize 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 will have a tremendous impact on economic policy at a difficult time for the United States. Unemployment is at a nearly 54-year low while GDP data shows robust growth, but the data is coupled with inflation at a four-decade high and aggressive rate hikes to contain consumer prices. The Federal Reserve has hiked interest rates eight times in the last year, raising interest rates from virtually zero a year ago to a target range of 4.5% to 4.75%, the highest since October 2007.
In a statement announcing the decision, Biden called Brainard “one of the country’s leading macroeconomists.”
“She is a trusted veteran in all of our business institutions and understands how business affects people on a daily basis,” he said.
Brainard will help lead Biden’s negotiations with House Republicans in what promises to be a contentious and tricky battle over raising the US debt ceiling later this year. The White House had drawn a hard line on the matter, saying it would not negotiate the crucial funding move, while the GOP insisted on cutting spending to win its support.
Brainard was listed as a possible Treasury Secretary or replacement for Federal Reserve Chair Jerome Powell. She currently serves as Powell’s vice chair. Her appointment would help mend ties between the West Wing and the Treasury Department, which have at times been politically in contention, people familiar with the matter say. Brainard served at the Fed for three years alongside Treasury Secretary Janet Yellen. She also served as Undersecretary of the Treasury Department from 2009 to 2013 and held Deputy NEC roles.
Yellen has announced that he will remain at the Treasury Department until the end of Biden’s term.
Brainard is known as a harsh critic of Wall Street, opposing proposals to repeal regulations created after the Great Recession. She has also discussed the impact of climate change on the financial sector. As NEC Director, Brainard is tasked with drafting 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 positions. Robert Rubin, who headed NEC from 1993 to 1995, was later appointed Secretary of the Treasury by then-President Bill Clinton. Larry Summers, who succeeded Rubin at the Treasury Department, took the opposite path: He returned to government in 2009 to head the National Economic Council for former President Barack Obama.
Bernstein, a former social worker and longtime Biden ally who served as his chief economist and economic adviser during the Obama administration, is currently a member of the board he will lead.
“Jared is a brilliant thinker and one of my closest and longest-serving economic advisors,” Biden said. “He is an expert on worker empowerment and worker-centric economic policies, which have long been at the heart of my economic vision.”
Bernstein’s position requires Senate confirmation, which shouldn’t be difficult given the 51-seat Democratic majority.