President Barack Obama will name Gene Sperling, a counselor to Treasury Secretary Timothy Geithner, as head of the National Economic Council, according to a person familiar with the matter.
Sperling, 52, is returning to the post he held from 1997 to 2001 under former President Bill Clinton. He replaces Lawrence Summers, who was NEC director for the first two years of Obama’s presidency and left last month to return to Harvard University.
Obama is set to announce several appointments to his economic team tomorrow. They are among a series of changes for the White House staff as the president enters the second half of his term and prepares for a campaign for re-election in 2012. Obama today named William Daley, a JPMorgan Chase & Co. executive and former commerce secretary, as his new chief of staff.
“This is a pretty major retooling,” White House press secretary Robert Gibbs, who plans to leave his post, said of the changes at a briefing yesterday.
The National Economic Council coordinates administration policy and gauges the effect of legislation. The director’s job is a key post as the White House tries to get its economic agenda through a Congress where Republicans now control the House of Representatives and Democrats have a narrower majority in the Senate.
Budget and Deficit
Obama has said he wants to balance the need for government spending to keep the economy on track while also addressing the nation’s long-term debt. The federal budget deficit was $1.3 trillion last fiscal year and is projected to remain above $1 trillion this year by the Congressional Budget Office.
“Gene has done the job before, he has done it in the context of budgetary stringencies,” said Douglas Holtz-Eakin, a former CBO director who was chief economic adviser to Republican Senator John McCain during the 2008 presidential election. “Now Obama’s got someone who understands what it’s like to govern in a divided government and in a world where budgetary issues are the center.”
The potential pitfall for the administration is that Summers and Sperling bring different approaches to the job, he said.
“The dangerous part is that you go for someone who’s comfortable making decisions based on their gut to someone who runs the process and maybe never finally makes a decision,” Holtz-Eakin said. “Gene is very deliberate.”
As counselor to Geithner, Sperling already is frequently involved in administration economic policy discussions.
While Sperling doesn’t have Summers’s standing as an economist, he brings to the job experience as a veteran negotiator. He played key roles crafting the administration’s economic policies, including the bailout of General Motors Co. and Chrysler Group LLC and most recently in forging Obama’s compromise with Republican leaders to extend the 2001 and 2003 income tax cuts.
Obama has vowed to keep his administration focused on the economy amid signs the recovery is strengthening. The Standard & Poor’s 500 Index rose 13 percent in 2010 after a 23 percent jump in 2009, making it the biggest two-year advance since the Internet-bubble rally of 1998 and 1999.
Still, it will take years to make up for the 8.4 million jobs lost during the 18-month recession that ended in June 2009. December is forecast to be the 17th month in which unemployment has been 9.5 percent or higher. For all of 2010, joblessness likely averaged 9.7 percent, the worst year since 1982.
The NEC was created in 1993 by Clinton to coordinate economic policy-making and monitor implementation of the president’s economic agenda. It is separate from the White House Council of Economic advisers, which was established to give the chief executive analysis and advice.