Obama pragmatic in casting a new team on the economy

President Obama has gone pragmatic in recasting his economic team with several Clinton administration officials who survived the fiscal battles of the 1990s.

Both Gene Sperling and William Daley, named by Obama this week as director of the National Economic Council and White House chief of staff, respectively, worked with President Clinton in fights over taxes, trade and the budget with a Republican Congress.

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They join fellow Clinton-era veteran Jack Lew, who recently took over as director of the Office of Management and Budget, the same position he held for the last Democratic administration.

While not terribly different from their predecessors when it comes to ideology or policy views, fiscal analysts say members of the “new team” have pragmatic reputations and extensive experience that could serve the administration well as it looks to make progress on issues like raising the debt ceiling and on tax reform.

They are also already boosting the White House’s credentials with a business community that soured on Obama during his first two years in office.

Groups like the Business Roundtable have had generally positive responses to the appointment of Sperling, who has been a counselor to Treasury Secretary Timothy Geithner, as well as Daley.

At the same time, most experts on both ends of the political spectrum do not expect to see a change of course in policy from the White House on economic issues.

“I think it’s kind of a stay-the-course move,” Dean Baker, the co-director of the left-leaning Center for Economic and Policy Research, said of the president’s changes. “This is not the sort of team that would look to say: ‘Back to the drawing board.’ ”

To be sure, the current crop of economic advisers is not merely a carbon copy of their predecessors. As a whole, Sperling, Lew and Austan Goolsbee — the current chairman of the White House Council of Economic Advisers — have something of a less academic reputation than the trio they replaced – Lawrence Summers, Peter Orszag and Christina Romer, respectively.

Goolsbee, Lew and Sperling have cultivated relationships as pragmatists as well, with the latter two known for their abilities to steer their way through Washington’s policy corridors.

Lew and Sperling, who were both chosen for positions they previously held in the Clinton administration, are both credited with helping broker the tax-cut compromise with congressional Republicans late last year. They also played roles in the budget discussions that eventually led to a government shutdown in the mid-1990s, an outcome that hurt Republicans politically.

That history could come in handy in the coming weeks. Congress will soon have to decide whether to raise the debt limit, a vote some Republican freshmen have so far refused to commit to and a move that GOP leaders have said they want to see joined by spending cuts.

House Republicans also have announced that they will look to slash discretionary spending, and congressional leaders from both parties — not to mention the president — are talking more and more about pursuing a reform of the country’s tax code.

Still, no matter how much Lew and Sperling have honed their skills, it remains to be seen how much common ground the administration can find with House Republicans, who have made repealing the health care overhaul — the president’s signature achievement so far — their top priority.

“They are operating on a completely different wavelength,” Thomas Mann, a congressional expert at the Brookings Institution, said about congressional Republicans in an e-mail. “I look for conflict and confrontation, not negotiation and compromise.”

Looking at trade issues, Daley, a former Commerce secretary who helped push the North American Free Trade Agreement through Congress early on in the Clinton administration, may also prove to be a key player.

"He knows how to use power, and it runs in the family," said William Reinsch, who worked under Daley at Commerce and is now the president of the National Foreign Trade Council. “He knows how to make sure a decision gets implemented.”

When it comes to the economy, though, some analysts think that the biggest change may have less to do with what Daley and the recent economic appointments think about a certain issue or what skills they bring to the table — and more about the different mindset the new team will be able to use.

In short, according to Third Way’s David Kendall, the new economic advisers will be able to be more proactive than reactive.

“The old team kept the government from going awash in red ink, kept us from going into a depression,” said Kendall, a senior fellow at the center-left think tank, where Daley has sat on the board. “As we’re emerging to more solid economic footing, this new economic team will really be able to think about how economies grow and how the government can support that.”

But others cautioned that it remains to be seen just how much influence the new crop of advisers would have in the White House.

“I think the first thing you have to think about is, is the president going to listen to them any more than he did to their predecessors?” asked J.D. Foster, a senior fellow at the conservative Heritage Foundation.