By Lori Montgomery and Brady Dennis
Washington Post Staff Writers
Friday, January 7, 2011; 10:56 PM
With the economy shifting from crisis to recovery, President Obama completed an overhaul of his economic team Friday that relies heavily on veterans of the Clinton administration to wage the coming battle with Republicans over spending, taxes and government's role in society.
Obama named Gene B. Sperling as director of the National Economic Council, the same job Sperling held for four years under Bill Clinton. Though Sperling is not an economist by training, he is valued as a savvy political strategist with proven ability to extract victories on fiscal issues from a hostile Congress.
"One of the reasons I've selected Gene is he's done this before," Obama said Friday during a news conference at a window manufacturing company in the Prince George's County suburb of Landover. Under Clinton, Obama said, Sperling "helped formulate the policies that contributed to turning deficits to surpluses and a time of prosperity and progress for American families in a sustainable way."
Sperling, who had been serving as a counselor to Treasury Secretary Timothy F. Geithner, joins an economic team that includes several other former Clinton staffers, including Jacob Lew, who has returned to his old job as White House budget director. When Sperling and Lew were last in their current posts, the economy was booming, and they had balanced the federal budget for the first time in nearly 40 years after cutting a deficit-reduction deal with a Republican Congress.
They return to a sluggish, post-recession recovery marked by chronically high unemployment, a rising national debt and the biggest budget deficits - measured against the economy - since World War II. Republicans are once again ascendant on Capitol Hill. And after two years of policymaking aimed at averting an economic meltdown, the administration is retooling for a protracted political fight over fiscal and economic issues in the run-up to the 2012 presidential campaign.
Sperling replaces Lawrence H. Summers, a respected economist who served as Clinton's Treasury secretary and later as president of Harvard University. Sperling lacks that stature. But his admirers say he is a more-gifted communicator and political operator, able not only to shape the administration's message to the public but also to find common ground - if it exists - with the GOP.
"I think he's a huge upgrade from Larry Summers," said Leonard Burman, an economist at Syracuse University who worked with both men during the Clinton administration when he served as deputy assistant treasury secretary. "Summers is brilliant. But his political IQ is many points below Gene's."
Sen. Charles E. Schumer (D-N.Y.), the third-ranking Democrat in the Senate, said Sperling is perfectly suited to the times. "In 2009, the complete thrust had to be economics. Now, politics is every bit as important, and he can do both," Schumer said. "He has a feel for what is politically possible on the economic side of things. He gets it."
In an interview, Sperling said the key to his success "is to figure out how to work with Republicans while taking home important progressive wins, to find that bridge where you both preserve your values and get things done."
Sperling, 52, was born in Ann Arbor, Mich. He received a bachelor's degree in political science from the University of Minnesota and a law degree from Yale. He has been an enthusiastic campaign warrior, advising virtually every Democratic presidential nominee since Michael Dukakis in 1988.
A workaholic, notorious for keeping ridiculously late hours, Sperling rocketed through the Clinton ranks, rising from campaign adviser to NEC director, the top White House economic post with broad authority to coordinate policy across Cabinet agencies. After Republicans claimed control of Congress in 1994, Sperling was instrumental in navigating budget battles that shut down the government and led in 1997 to a bipartisan deal to balance the budget.
William Hoagland, a longtime senior budget aide to Senate Republican leaders, said Sperling was good at building trust and finding compromise.
"You know how some people come across rather haughty or certain in their viewpoint? It's my way or the highway? He never impressed me as that," Hoagland said. "He made his case, but he was always willing to look for alternatives, to come to the middle."
After betting on the wrong horse - Hillary Rodham Clinton - in the 2008 campaign, Sperling found himself on the outside when Obama took office. Geithner, a longtime tennis partner, brought Sperling into Treasury and gave him a varied portfolio that included health care, taxes and the budget.
Sperling's big break came late last year, when he played a key role in cutting a deal to extend an array of tax cuts enacted during the Bush administration.Republicans demanded a temporary extension of tax cuts for the wealthy; Obama wanted an extension of his signature middle-class tax cut in return. Republicans objected, and Sperling came up with a solution: a temporary payroll tax holiday for workers that will inject even more cash into the economy this year than the "Making Work Pay" tax credit would have.
Sperling also preserved temporary tax breaks that benefit low-income families, including an expanded tuition credit.Although Obama has come under fire from some liberals for relying too heavily on former Clinton staffers, Robert Greenstein, founder of the liberal Center on Budget and Policy Priorities, said Sperling has a long history of "looking out for working-poor families with kids."
Obama announced other changes to the economic team Friday: Jason Furman, a former Clinton adviser who served as Summers's deputy on the NEC, received the title of principal deputy director of the NEC. Heather Higginbottom, deputy director of the White House Domestic Policy Council, was tapped to serve in the budget office as deputy director.
And Obama nominated University of Maryland economist Katharine G. Abraham to the three-member Council of Economic Advisers, replacing Austan Goolsbee, who now serves as CEA chairman.