Now he has far more people on his team who are steeped in the ways of Washington budget negotiations and debates over spending and taxes.
Seeking to prevent a complete turnover on his economic team, the White House has been exerting intense pressure on Treasury Secretary Timothy F. Geithner to stay even though he has told the president he wants to step down. Austan Goolsbee, the Council of Economic Advisers chairman who has been with Obama since 2007, is returning to the University of Chicago.
Administration officials say the president has brought in members of the new team — such as Gene Sperling, director of the National Economic Council — skilled at passing economic policy in difficult economic environments. The officials pointed out that many other economists remain, including Jason Furman, a Harvard-trained economist who is Sperling’s top deputy.
Devising a strategy on the economy will be critical for the country and for the president’s political hopes. Economists are increasingly warning that the nation could slip back into recession.
The last economic crisis occurred in late 2008 during the waning months of the Bush administration, and the White House largely left the policy response in the hands of the Treasury. With Obama’s bid for a second term in the balance, the president will have to take more direct control if new economic troubles develop during the coming campaign.
Yet the president’s team also has less flexibility now as it seeks ways to boost the economy. Congress is stuck in a severe partisan gridlock, with Republicans in charge of the House. Republicans have vowed to block many of the president’s ideas for helping the economy.
“For an economic team, what really matters is do they work together to consider the full set of sound options in play and offer the wisest recommendations in light of both the economic challenges and constraints the president faces,” Sperling said.
The Obama administration could also be vulnerable because of misjudgments about the severity of the economic decline. Obama’s team underestimated how high the unemployment rate would go and then showed a great amount of optimism last year that the economy was recovering. The White House declared last summer, for instance, the “summer of recovery.” Geithner wrote in an op-ed that “we are on a path back to growth.” Vice President Biden toured the country, promoting the gains.
“It’s clear that the entire country, including the administration, has been bitterly disappointed by economic developments in the last nine months or so,” said William Galston, a former policy adviser to President Clinton and Democratic presidential candidates. “I’m sure the White House in retrospect wishes it handled last summer somewhat differently.”
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