Biden’s economic team will look different in 2023. But how different is the question.
Tuesday night, Axios mentioned it White House officials contemplate the possible departure of three top economic officials after the November elections – Janet Yellen, Treasury Secretary; Brian Dees, Director of the National Economic Council; Cecilia Ross, Chair of the Council of Economic Advisers (CEA).
In a statement to Yahoo Finance, a White House official denied the report, saying, “While we prudently plan for potential transitions after the midterm elections, neither Secretary Yellen nor Brian Daisy are part of those plans.” The official also noted that Ross will finish her time at the White House “probably in the early spring of 2023” to return to Princeton, from which she is currently on leave.
Either way, the report left economic observers wondering what impact the departures could have on the White House’s ongoing response to the turbulent economy, stubborn inflation, and potential recession — all of which are likely to remain front and center for Biden’s team in 2023.
“It wouldn’t be surprising if after two years you start to see some change in the cabinet,” said economist Austin Goolsby, who himself held one of the top seats, Wednesday appearance with Yahoo Finance Liveindicating that these changes are in line with historical trends.
The former CEA chief also downplayed the implications of potential departures. “If you look at the historical pattern of legislative activity, in a year the president is doing about everything he would do legislatively on the financial side,” he said, adding that subsequent actions tended to be “on a much smaller scale than … in the first 100 days of the first year.”
On Agenda 2023
Biden and his team were already busy financially during his first two years in office, signing bills like America’s rescue planThe Bipartisan Infrastructure LawThe America’s Chip ActAnd the Inflation reduction law.
But looking ahead, a Republican takeover of one or both houses of Congress could mean it could be difficult to get large bills to follow through. For Biden and his aides, working to implement the laws passed during his first two years in office may become the top priority on the economic front. The law to reduce inflation, in particular, It has some provisions that will not be activated for years.
In a note after the Axios report, Cohen Washington Research Group suggested that there will be minimal policy implications for potential trading volumes at the Treasury, particularly in relation to cryptocurrencies and the push towards stable currency monitoring. The group indicated that the two most likely successors would be Commerce Secretary Gina Raimondo or Federal Reserve Vice Chair Lael Brainard.
On the other hand, the group writes that “Brainard will be closer to continuing the status quo,” especially with regard to cryptocurrencies. But for Secretary Raimundo, they said, “It’s hard for us to see her fundamentally changing Yellen’s approach.”
Meanwhile, Republicans aim to derail Biden’s economic agenda if they take power. They largely spent 2022 campaigning that Biden’s policies, particularly the $1.9 trillion U.S. bailout, drove up inflation.
Rep. Patrick McHenry (10th District of North Carolina) is set to lead the House Financial Services Committee in 2023 under potential GOP control. recently said“The first thing is to stop digging the trench” when it comes to fighting inflation, adding that tight oversight of the Biden administration is the second priority.
‘For the president’s advisors, it’s a fast sprint’
In any case, economic team turnover is common after two years of a new presidency. Indeed, two years later, both Bill Clinton and George W. Bush faced the challenge of replacing the big three members of their economic teams.
But if Secretary Yellen were to leave, she would be leaving more quickly than two of her predecessors, who also served newly elected presidents. Timothy Geithner (Obama) and Steven Mnuchin (Trump) both entered the Treasury and remained throughout their presidents’ terms.
In all, four of the six Treasury secretaries who entered office remained with a new president throughout the entire term. The two who left earlier, Lloyd Bentsen under Bill Clinton and Paul O’Neill under George W. Bush, left shortly after the midterms.
Meanwhile, others had shorter runs. Yellen actually worked longer than Larry Summers, who took up a residency at the Treasury in July 1999 and left with the inauguration of George W. Bush in 2021. Summers has remained prominent as an economic commentator studying only this week on issues such as UK tax cuts And the Chances of a “hard landing” for the economy.
Multiple sources in the Axios Report also emphasized that Yellen’s departure is far from a rift and that the outcome of the November elections will influence the decision. “Secretary Yellen has no plans to leave,” Lily Adams, a senior aide to Secretary Yellen, told Yahoo Finance.
Meanwhile, the tenures of the other two major economic positions – Director of the National Economic Council and Chairman of the Council of Economic Advisers – are often much shorter historically. There is only one example in the past 30 years – Gene Sperling’s first experience as a Director of NEC during Bill Clinton’s second term – of someone who held either position for 4 years.
Sperling, who also held the title under Obama, may be in line for a third time at the top of the NEC if Daisy leaves.
For his part, Goolsbee ran CEA for Barack Obama for nearly a year and noted on Wednesday, “For the president’s advisors, this is a sprint, and for the president himself, it’s a marathon.”
Ben Wershkull is the Yahoo Finance correspondent in Washington. Jennifer Schönberger contributed to this article.