Biden assigns Brainard, Bernstein to head economic team
The move, made after the closure of financial markets, reportedly provides Biden with a pair of "trusted" Washington insiders to lead economic policy as the fear of inflation persists.
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US President Joe Biden in Washington, D.C., on March 31, 2022 (AFP)
US President Joe Biden named Federal Reserve Vice Chair Lael Brainard and White House economist Jared Bernstein as his top economic advisors on Tuesday, another attempt by the US President to persuade skeptical US citizens that his economic policies are effective.
The move, made after the closure of financial markets, reportedly provides Biden with a pair of trusted Washington insiders to lead economic policy as the fear of recession fades but inflation persists. There will also be heated debates in the Republican-controlled House of Representatives about lifting the debt ceiling.
Biden named Brainard to the National Economic Council (NEC) to replace Brian Deese, who announced his departure earlier this month and said he would nominate Bernstein to the Council of Economic Advisers (CEA) to replace Cecilia Rouse, the first Black American to hold that position, who will return to Princeton University. Bernstein is already a member of the CEA.
In a statement, Biden said, "Lael and Jared will help bring a seriousness of purpose to the task of building a strong, inclusive, and more resilient economy for the future."
He claimed the new team's emphasis on delivering a gentle landing amid the Federal Reserve's sustained interest rate hikes to reign in inflation, developing an inclusive economy and assisting US firms to prosper and become more competitive.
In the loop
The reshuffle comes as the White House attempts to address what officials see as "a frustrating gap between relatively robust economic data and lackluster public sentiment."
It is worth noting that Biden's popularity rating fell 6 percentage points to 36% in a new Reuters/Ipsos poll.
Biden also gave deputy NEC director Bharat Ramamurti, a former advisor to Senator Elizabeth Warren and a vociferous critic of oil and gas firms' windfall profits, the new job title of advisor for strategic economic communications.
Current CEA member Heather Boushey was assigned as Chief Economist in Biden's new "Invest in America" cabinet.
In his State of the Union address last week, Biden reiterated his commitment to eliminate "trickle-down" economics from politics and chastised corporations for profit. His new economic team may spend less time developing new policies and more time supervising nearly $1 trillion in additional federal spending on semiconductor manufacturing, infrastructure, and green tax credits.
One of the most difficult issues for Biden's administration will be avoiding a US debt default in the face of the House of Representatives now dominated by Republicans who refuse to raise the statutory debt ceiling without slashing future spending. The White House has refused to negotiate expenditure cutbacks without first raising the debt ceiling.
The Fed is attempting to seek a "soft landing" for the economy, which entails lowering inflation without precipitating a recession.
This is happening as GDP and economic output in the United States have dramatically faltered year on year, and even from the previous quarter, at the end of 2022.
Meanwhile, US inflation surged to a new four-decade high in May, defying hopes that price pressures had peaked and deepening President Joe Biden's political troubles as Americans struggle to meet the cost of essentials like food and gas.
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