What a second-term Obama economic team might look like

October 2, 2012

In the high campaign season, the clash between President Obama and Mitt Romney demands most of the attention of the two rivals and their aides: how to attack, when to parry and so on. There is not much time on the trail for them to consider the gory details of how they might govern, in a second term for Obama or a first for Romney.

But come Jan. 20, somebody will govern, and he will confront an economy that remains stuck in high unemployment and slow growth, as well as enormous budget deficits and a polarized political environment that makes addressing either a difficult task.

Based on conversations with economic policy veterans allied with each party, here is a rundown of how the president could build his economic team as he picks his Treasury secretary and White House advisers, with the Romney version to come Thursday.

Timothy F. Geithner has made no secret of his intention to step down as Treasury secretary at the end of Obama’s first term, leaving open the administration’s senior-most economic policy job. When Geithner came into office in 2009, job No. 1 was rescuing the nation’s financial system. In 2013, the Treasury secretary faces the challenge of helping to manage high-stakes negotiations over U.S. fiscal policy. Obama, his aides have said, hopes to leave office with a longer-term deficit reduction deal in place.

Two veterans of fiscal policy battles would have an edge in considerations for the big office at 1500 Pennsylvania Ave.: White House Chief of Staff Jacob Lew and fiscal commission co-chairman Erskine B. Bowles, who was a chief of staff in the Clinton administration. Both know the budget backward and forward and have long experience in the trenches negotiating with congressional Republicans.

Lew is a favorite of many inside the White House and is viewed as an effective chief of staff. But in moving next door to the Treasury Department, Lew would leave Obama with another major job to fill.

Bowles has shown more independence from the president and less willingness to toe the Democratic Party line while leading the Simpson-Bowles commission. But he would also add to the president’s credibility as a deficit hawk in negotiations over a long-term budget deal.

Other names that could show up on the list include outsiders, such as Wall Street titans Larry Fink and Roger Altman, and administration insiders, such as Gene B. Sperling of the National Economic Council, Deputy Treasury Secretary Neal S. Wolin and Lael Brainard, undersecretary for international affairs.

Other changes to the economic team would probably be less dramatic than they would be under a Romney administration, but there is sure to be some shuffling around as some officials return to the private sector or seek new jobs within the government.

Michael Froman, the White House adviser for international economic matters, is a strong candidate to replace Ron Kirk as U.S. trade representative.

Sperling, who was also NEC director during the Clinton administration, seems inclined to stay around a bit longer, even without a promotion. But at some point there might be a vacancy in that crucial job of coordinating the administration’s economic policy. If Sperling took that job, it would offer a chance for one of his deputies, such as Jason Furman, to succeed him as NEC chief.

Jeffrey Zients has won strong reviews for his performance as acting director of the Office of Management and Budget, despite having relatively little experience with the federal budget. Coming from a corporate background — as chief executive of the Advisory Board Co. — Zients worked on the management side of the OMB before serving as acting budget chief. With his business-heavy résumé, he could be tapped for commerce secretary and serve as the administration’s liaison to the corporate world, working to patch up Obama’s strained relationship with business.

Lew and Bowles are most experienced with domestic fiscal matters. If either is named Treasury secretary, he might consider a deputy with a strong background in international affairs. Brainard, Geithner’s point person on the euro-zone crisis, the United States’ economic relationship with China and other delicate tasks of financial diplomacy, would offer that experience.

If she took that job, Brainard could be in line to take Treasury’s top job late in Obama’s second term or in a future Democratic administration, as Larry H. Summers did after serving as deputy secretary under Robert Rubin. But there’s also a chance she could move to the White House, perhaps to succeed Sperling at the NEC.

Mary Miller, the Treasury undersecretary for domestic finance, could emerge as a candidate for any of several financial regulatory jobs, such as a post on the Commodity Futures Trading Commission or as one of the bank regulators.

by Neil Irwin

In the high campaign season, the clash between President Obama and Mitt Romney demands most of the attention of the two men and their aides: How to attack, when to parry and so on. There is not much time on the trail for them to consider some of the gory details of how they might govern, in a second term, for Obama, or a first, for Romney.

But somebody come Jan. 20 will govern, and they will confront an economy that remains stuck in high unemployment and slow growth, enormous budget deficits and a polarized political environment that makes addressing either a difficult task.

Obama and Romney may not be spending vast amounts of time thinking about who their Treasury secretary and White House economic advisers will be, but we are. Based on conversations with economic policy veterans allied with each party, here is some educated guesswork at how they are likely to build their teams. Obama is Tuesday; Romney will come Wednesday.

Timothy F. Geithner has made no secret of his intention to step down as Treasury secretary at the end of the president’s first term, which creates a vacancy in the administration’s senior-most economic policy job. Whereas when Geithner came into office, rescuing the financial system was job No. 1, it now looks likely that the main challenge facing the next secretary will be to help manage high-stakes negotiations over U.S. fiscal policy; Obama, his aides have said, hopes to leave office with a longer-term deficit reduction deal in place.

Because that’s the case, two veterans of fiscal policy battles have the edge in being considered for the big office at 1500 Pennsylvania Ave.: White House Chief of Staff Jack Lew and fiscal commission co-chair Erskine B. Bowles, who was a chief of staff in the Clinton administration. Both know the budget backward and forward and have long experience in the trenches negotiating with congressional Republicans.

Lew is a favorite of many inside the White House; he is viewed as an effective chief of staff. But his moving next door to Treasury would create a major vacancy and leave Obama with another important job to fill.

Bowles has shown more independence from the president and less willingness to toe the Democratic Party line while leading the Simpson-Bowles commission, but he would also add to the president’s credibility as a deficit hawk in negotiations over a long-term budget deal.

Think of any other names that might be mentioned for the job as “below the line” — interesting possibilities, perhaps, particularly if neither Lew nor Bowles work out, but less likely to end up at the helm of Treasury. That includes outsiders such as Wall Street titans Larry Fink and Roger Altman and administration insiders such as Gene B. Sperling of the National Economic Council, Neal S. Wolin, the deputy Treasury secretary, and Lael Brainard, the undersecretary for international affairs.

Other changes to the economic team will probably be less dramatic than they would if Romney won. But there is sure to be some shuffling around as some officials return to the private sector and others seek new jobs within the government.

Michael Froman, the White House adviser for international economic matters, is a strong candidate for U.S. trade representative, a job currently held by Ron Kirk.

Sperling, who has been the NEC director for nearly six of the past eight years that a Democrat has been president, seems inclined to stay around for a bit longer, even without a promotion, though there would probably be a vacancy in that crucial job coordinating the administration’s economic policy at some point in Obama’s second term. It would be a chance for one of Sperling’s deputies, such as Jason Furman, to get a promotion.

Jeff Zients has won strong reviews for his performance as acting director of the Office of Management and Budget, despite having relatively little experience with the federal budget. He came from a corporate background, as chief executive of the Advisory Board Co., and worked on the management side of the OMB before taking the vacant director position. His business-heavy resume makes him a natural to be a stronger-than-usual commerce secretary and serve as the administration’s liaison to the corporate world, with which Obama has had a strained relationship.

Should Lew or Bowles be named Treasury secretary — both are most experienced with domestic fiscal matters — they may want to appoint a deputy with stronger background in international affairs. Brainard would be an obvious choice; she has been Geithner’s point person on the euro-zone crisis, the United States’ economic relationship with China and other delicate tasks of financial diplomacy.

That would be the model followed by Larry Summers, who received a similar promotion to serve as deputy Treasury secretary under Robert Rubin. If it goes as well for Brainard as it did for Summers, it could set her up as a potential Treasury secretary late in Obama’s second term or in a future Democratic administration. But a move to the White House, perhaps to Sperling’s old job at the NEC, cannot be ruled out.

Mary Miller, the Treasury undersecretary for domestic finance, could emerge as a candidate for any of several financial regulatory jobs, such as at the Commodities Futures Trading Commission or one of the bank regulators.

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