The White House has no shortage of people working on economic policy — former executives, high-profile academic economists, masters of the budget.
But one group of aides is emerging as highly influential as President Obama shifts the focus of his economic policy from crisis management to trying to stimulate and manage growth: the Domestic Policy Council, led by Melody Barnes.
Barnes, a onetime top lawyer to the late Sen. Edward M. Kennedy (D-Mass.), and her team have navigated to the center of the administration’s economic strategy. They’ve helped to craft policies on education and clean energy, which Obama has said are key to securing the nation’s economic future — what he has called a “competitiveness” agenda.
Obama recently appeared on Spanish-language television to promote his education policy. It was one of nearly a dozen appearances on the issue in the past month. He also recently spent two days discussing his vision on developing new clean energy.
For Barnes, education, above all else, is the linchpin for economic and domestic policy.
“It’s a big mistake not to recognize education as an economic issue,” Barnes said. “We have seen a real loss in the [gross domestic product] as a result of not applying the same kind of education reforms that some of our global competitors have.”
She and her team have made a priority of marrying funding for education programs with what business executives and economists say is needed in the workforce.
“We have a realistic understanding of what the private sector is really looking for, and we’re looking to align education with what’s needed in the real world,” she said.
Barnes is leading several “real world” initiatives. One program encourages community colleges to develop skills to help fill specific jobs that companies have open. Another is focused on trying to create economic clusters resembling Silicon Valley.
Barnes’s high-profile role on economic policy is a key example of an administration in transition. In the first two years, Obama’s policies centered largely on stemming sharp economic decline. Now the president has turned toward building a foundation for economic growth — and education, energy and infrastructure are its cornerstones.
“You are seeing a shift from the rescue phase of the economy to a transition to a growth phase,” said Austan Goolsbee, chairman of the Council of Economic Advisers. “And as you shift to growing the economy, the things that make America a competitive place internationally are rooted in domestic policy broadly and not just purely macroeconomic policy.”
Gene Sperling, director of the National Economic Council, said that Barnes has always been a “forceful member of the economic team.” But, he added, as issues such as education have moved to the forefront, “her leadership on the economic agenda has grown even more prominent.”
Before joining Obama’s campaign, Barnes, 46, and a native of Richmond, was executive vice president for policy at the Center for American Progress, a left-leaning think tank.
At the White House, her reputation transcends her policy bona fides. She’s known for an ability to work well with others, as well as for being the president’s first female golfing buddy. But it’s her laser-like focus and stiff spine that admirers home in on.
Barnes supported the Education Department’s decision to award large grants to only two states in its “Race to the Top” innovation competition, despite enormous political pressure to include more.
“Melody’s so nice and polite, but she’s got a backbone of steel,” said Education Secretary Arne Duncan.
And as the White House put the final touches on the health-care law last year, Barnes stood up against especially tough political pressure that saw education reforms as a distraction.
“As health care went along, there was a shrinking opportunity to do education, and Melody played a pivotal role in making sure we kept looking for an opportunity to get education enacted,” said Phil Schiliro, a top White House official.
Now Barnes and her policy team face ever-tightening federal purse strings and are racing to find more ways to partner with the private sector.
“I’ve spent a fair amount of time speaking to CEOs and others about our educational reform agenda,” Barnes said. “They tell me that when they’re thinking about where they’re going to locate their manufacturing base, they think about the educational opportunities they’re looking at. We know they have the opportunity to base their operations in the U.S. or elsewhere.”
But while she’s already received funding for some of her initiatives and showered attention on them, it will be years before anyone knows whether she’s succeeded at helping to boost U.S. economic competitiveness. Some would prefer that the White House spend more time emphasizing policies that will lower unemployment in the short term.
Still, Barnes is staying on message.
Sandwiched between Obama’s education talk on Spanish-language television and his energy speech last week, Barnes made an appearance of her own — before the National Urban League — where her remarks focused largely on boosting educational opportunities.
“Education goes beyond fairness,” she told the civil rights group’s audience. “It is an economic necessity.”