President Joe Biden is poised to shake up his leadership team with two veteran economic minds likely to assume new roles just as he faces his best chance yet to avoid a recession that could derail his reelection effort.
Biden aides expect a rapid succession of appointments, including Federal Reserve Vice Chair Lael Brainard as the next National Economic Council director and long-time Biden confidant Jared Bernstein as chair of the Council of Economic Advisers. Biden has already named businessman and former Covid-response czar Jeff Zients as his next chief of staff.
The shakeup would give the president three well-known players from across the Obama-Biden presidential years at a key moment for the economy. The Federal Reserve is slowing the pace of its sharp and brutal rate hikes aimed at crushing 40-year-high inflation, the job market is holding up, and big overseas economies including the Eurozone are narrowly avoiding recessions.
But it remains highly uncertain whether the Fed can navigate a so-called soft-landing for the economy, in which growth slows but the country averts a recession. And other big headaches loom, including a GOP-controlled House potentially forcing a market-shaking showdown over raising the government's debt limit.
Multiple senior Biden aides and others close to the process described the selection of Brainard and Bernstein, who is currently a member of the Council of Economic Advisers, as close to assured, but no formal announcement is set yet. It's still possible that either job could wind up slipping to one of several other candidates or that new names could emerge, they said.
Brainard, who is meeting with other Fed officials this week in Washington to decide on the central bank's next interest rate hike, could not be reached for comment.
“It’s not totally done yet,” one top White House official said, while not disputing that Brainard and Bernstein are the leading candidates. Another senior official agreed, while a third said the two appointments seemed definite but that Biden had not given a final sign-off.
White House Deputy Press Secretary Emilie Simons said in a statement, "There is no decision on either of these positions and any reporting to the contrary is inaccurate."
The White House officials said installing Brainard at NEC to succeed Brian Deese would offer gender diversity to the economic leadership, It would also make it easier for Biden to pick his friend Bernstein, who is among a group of older, white male advisers, to head the CEA, the White House's in-house economic research office. Current CEA Chair Cecilia Rouse is returning to Princeton. Deese is leaving the NEC — which is housed inside the West Wing and is the more powerful of the two offices — to be closer to his family,
A Brainard and Bernstein combination would at least partially satisfy left-leaning Democrats who pushed for a younger and more aggressive candidate for the NEC job such as Bharat Ramamurti, the current NEC deputy and a former top staffer for Sen. Elizabeth Warren (D-Mass.).
Progressives had questioned Brainard’s commitment on some of their key issues since she served as President Barack Obama’s Treasury undersecretary for international affairs under then-Secretary Timothy Geithner. At the time, Brainard was viewed by many progressives as insufficiently aggressive on using executive tools to fight climate change and economic inequality and as too pro-free trade and friendly with elite global bankers.
But Brainard has nudged left on some of those issues and been a progressive at the Fed on monetary policy — mostly preferring a gentler path of rate hikes to fight high inflation.
Bernstein is widely admired in progressive circles while also holding credibility with more centrist-leaning Democrats and even some Capitol Hill Republicans. He has long been a vocal critic of trade agreements so could limit any fallout among organized labor groups over the Brainard pick.
The selection of Brainard and Bernstein would come after weeks of feverish jockeying, often through strategic press leaks, for the top economic jobs, with a variety of names being floated as front-runners by Democratic insiders eager to see their preferred candidates get the jobs.
The White House has also flirted with various Wall Street veterans for top positions, including investment bankers Blair Effron and Antonio Weiss. Putting any such candidate into a policy-influencing spot would likely have enraged progressives, and the idea appears to have been mostly dropped.
Other candidates mentioned as candidates for NEC have included Deputy Treasury Secretary Wally Adeyemo, American University President and former Obama cabinet member Sylvia Mathews Burwell, Commerce Secretary Gina Raimondo and senior Biden economic adviser Gene Sperling.
Friends say that Sperling, who served as NEC director under both Presidents Bill Clinton and Obama, coveted doing the job for what would be a record third time. Sperling, who splits his time between Washington and Los Angeles, has repeatedly denied wanting or campaigning for the job.
Zients is viewed as a masterful manager and problem solver but less well-versed or interested in the kind of backroom political horse-trading required to push things like a debt limit deal through on Capitol Hill. Brainard has extensive Hill relationships as does Bernstein.
Bernstein and Brainard are both considered centrist enough to offer some comfort to Wall Street investors and not averse to cutting deals with Republicans if that's what it takes.
Brainard’s departure from the Fed would leave a significant hole at the central bank, where she is a trusted No. 2 to Chair Jerome Powell.
Brainard, a Ph.D. economist, also chairs four of the central bank's internal committees, leading policy in key areas like whether the Fed should issue a central bank digital currency.
Victoria Guida contributed to this report.
