Sure Looks Like It’s Yellen for Treasury

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Joe Biden said yesterday at a press briefing that he will appoint a Treasury secretary shortly before or after Thanksgiving. He added: “You’ll find it is someone who I think will be accepted by all elements of the Democratic Party, from the progressive to the moderate coalitions.”

That sure sounds like Janet Yellen, as we were the first to report on November 9. His transition team has leaked two other names of finalists, Fed governor Lael Brainard, who is definitely not loved by the progressive wing of the party; and retiring TIAA chief executive and former Fed governor Roger Ferguson, who is African American and politically moderate.

A couple of things were odd about this announcement. Why did Biden decide to name his Treasury secretary first, of all possible Cabinet appointments?

He doesn’t even know yet whether Democrats will control the Senate. And why did he mention that his nominee would be acceptable to “all elements of the Democratic Party,” since it is Republicans whose support he will likely need to get her confirmed?

He may have wanted to name his Treasury secretary first to stress his focus on all things economic, as he seeks to lead the economy out of its second pandemic-induced recession compounded by bad policy. But my sense is that it had more to do with internal Democratic coalition politics.

As we have reported, the Treasury secretary choice has been highly contentious, and he may want to get that done and behind him. In that respect, Yellen is heaven-sent. She is basically a liberal who is respected by conservatives. And as a successful former Fed chair, she will be difficult for Republicans to try to block.

This brings us to another contentious key economic-policy slot, OMB chief, which has heated up since we last reported that deficit hawk and senior Biden aide Bruce Reed was in serious contention.

Biden may also want to put this one away soon, before it erupts into a major brouhaha between Democratic progressives and Wall Street Democrats. Potential center-left unifiers include former NEC chair Gene Sperling and former Hillary Clinton legislative director Ann O’Leary.

Both Nancy Pelosi and Biden himself have called for massive recovery spending. This is no season for deficit hawkery.

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