The job of chief economist in the White House is typically a shaky, low-key job, with the holder primarily tasked with creating analysis and poring over charts and graphs. But President Joe Biden’s next election to lead the Council of Economic Advisers is preparing for a spate of political attacks centered on how the White House has been fighting inflation.
Jared Bernstein is a longtime member of Biden’s inner circle who has served in senior administration positions as well as in progressive think tanks focused on economic policy. Working first under Vice President Biden and now in the Biden White House, Bernstein has long had an unparalleled ability to channel the president’s economic values.
In his February statement announcing Bernstein’s nomination, Biden said, “He is an expert on worker empowerment and worker-centric economic policies that have long been at the heart of my economic vision.”
But that also makes Bernstein a target for Republican lawmakers.
Bernstein, who appeared frequently on television, was one of the most visible White House advocates that inflation, first seen in 2021, was “temporary” and would soon fade. He was a key supporter of the sweeping $1.9 trillion Covid-19 relief package that critics say has sparked the persistently high prices that have given Biden a political and economic headache. Bernstein and other White House officials claim the aid has boosted staff hiring on an historic scale.
Bernstein’s confirmation hearing before the Senate Banking Committee on Tuesday is one of the few opportunities GOP senators will have to directly follow Biden’s handling of inflation and publicly put the White House on defense.
“The committee needs to hear from Bernstein on how he will advise President Biden on economic issues,” said Ryann Durant, a spokeswoman for South Carolina Senator Tim Scott, the committee’s top Republican. “Inflation is the number one concern for American families, and the country deserves someone who takes the problems seriously — and not just working to advance progressive policies through a partisan tax and spending agenda.”
Bernstein is trying to replace Cecilia Rouse, an economist returning to Princeton University after two years in the Biden administration. Bernstein currently serves on the three-member Council of Economic Advisers, but to become its chairman he needs approval from the Senate, where Democrats hold a slim majority. Several moderate Democrats are up for re-election next November and have not been afraid to torpedo Biden picks when it might be politically beneficial for them back home with voters, though it’s unclear whether that dynamic will materialize with Bernstein’s nomination.
Republicans hope so. GOP aides have spent weeks poring over Bernstein’s public writings and media appearances dating back at least a dozen years, uncovering a number of statements they believe could harm his confirmation prospects, according to two officials working on the involved in developing the strategy.
For example, since early 2021, Bernstein has repeatedly stressed that any increase in inflation would be modest and “temporary”. Then, in July 2022 – amid rapid price increases – he said the use of the transitory description and its lack of specificity “introduced a level of ambiguity that wasn’t very conducive to debate”.
Republican senators are preparing to ask Bernstein about his economic advice on Biden and argue that he is largely a partisan academic, said the officials, who spoke on condition of anonymity to discuss internal strategy considerations.
Though much less of a focus than inflation, Republicans will also focus on Bernstein’s climate views, including his claim that fossil fuels are “grossly undervalued” and his argument that “we should take the Green New Deal really seriously.”
Senate Republicans’ argument for making a point is a endorsement by seven former Council of Economic Advisers chairs among GOP presidents who say Bernstein is well-qualified to take on the job. The letter, seen by The Associated Press, also states that Bernstein was one of the first to develop the concept of “opportunity zones,” which use tax law to encourage private investment in poor communities, and one of Scott’s key legislative ones achievements are.
Scott, whose Opportunity Zones initiative was part of the 2017 tax reform, is reviewing a run for the 2024 Republican presidential nomination.
“He is a collegial and inquisitive politician who enjoys engaging with other policy experts, including those with whom he disagrees, an important trait not always shared by economists involved in political affairs,” the statement said Letter first reported by The New York Times. “DR. Bernstein appreciates contributions from different perspectives.”
Meanwhile, Democrats, led by Senate Banking Committee Chair Sherrod Brown, D-Ohio, are rebuffing attempts by Republicans to politicize the traditionally uncontroversial job, noting that senators generally voted for the presidents of both parties they call wanted their in-house chief economist to have given in greatly.
Democrats have also noted that inflation has eased from its peak last year. And administrators are watching a key metric: are wages rising faster than inflation?
As of June last year, there was a large gap between the average hourly wage and inflation, but that gap has narrowed in a way that allows Bernstein to potentially tell lawmakers that the government is making progress on inflation.
Wages have increased by 4.2% year-on-year, while prices have risen by 5%. That gap of about 0.8% has narrowed from a peak of 3.5% last June, an indication that income growth could turn positive this year if inflation rates fall.
Before his hearing, Bernstein, 67, met with Democratic and Republican senators, both on and off the Banking Committee. He also prepared with briefings and mock hearings, according to a White House official who insisted on anonymity to discuss the preparations. Bernstein has not given media interviews since his appointment as head of the CEA.
Much of Bernstein’s research and analysis has focused on improving workers’ lives, and he has worked at both the Economic Policy Institute and the Center on Budget and Policy Priorities, two Washington-based liberal think tanks. His ability to clearly articulate Biden’s thinking is unique compared to his predecessors, who often came from academia and struggled to get the President’s attention.
Bernstein has a simple definition of what he calls “Bidennomics”. The theory goes that if you help bake a cake, you should get a fair share for the trouble. The free market is respected, and Bernstein often cites external economic forecasts from Wall Street analysts to support his arguments. But government exists to ensure that the market’s bounty is shared as widely as possible, he argues.
As Biden presented his pandemic relief package, Bernstein said the president’s economic team considered the risks that spending could push up inflation. But, supported by comments from Federal Reserve Chair Jerome Powell, Bernstein said the more serious threat was an overwhelming amount of aid.
“We’ve consistently argued that the risk of doing too little is far greater than the risk of going big, giving families and businesses the relief they need to finally get this virus behind us,” Bernstein said told reporters in February.
Biden has dismissed claims that his aid contributed to higher inflation, despite independent economic analysis suggesting so.
The economy has added 12.6 million jobs so far during Biden’s presidency, the highest cumulative total of any White House term, and the administration has vowed to lower inflation without sacrificing most of job gains — as has been the Fed’s effort to Tackling high prices can lead to delays and layoffs.
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