Will Biden Name a Deficit Hawk to Head OMB?

There is a big risk that he will—at a time when we need massive public investment.

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Yesterday, I reported that Bruce Reed, one of Biden’s top campaign advisers and his most conservative, has not yet been named to a White House job. As I wrote, he is an extreme deficit hawk.

I’ve since learned that Reed is being promoted to head the powerful Office of Management and Budget (OMB). That would be a match made in hell, given the need for extensive deficit spending.

OMB, which is part of the White House staff, prepares the administration’s budget proposal after bargaining with Cabinet departments and advises the president on spending. With interest rates near zero and the Fed pumping up financial markets, the usual fiscal-hawk blather about needing to cut deficits to reassure the bond market is even more nonsensical than usual.

OMB also houses the Office of Information and Regulatory Affairs (OIRA), a key choke point for federal regulations. All new rules from executive branch agencies have to go through the economists at OIRA, who apply cost-benefit analysis to alter or delay rules. In past presidencies, including Democratic ones, it has been where many ambitious proposals go to die.

Biden’s agency review team for OMB includes a number of executives from tech companies (Amazon, Lyft, Airbnb), and observers believe this is an effort at corporate infiltration of OIRA, to weaken regulatory reviews. That makes it even more troubling that a conservative, pro-business deficit hawk like Reed might run OMB.

But I left one thing out of my story. There is a second very senior inner-circle Biden adviser not yet named to a job—Jeff Zients. And like Reed, Zients represents the conservative wing of the Biden crowd.

Zients is also a contender for OMB. He’s not quite as much of a deficit hawk as Reed, but even closer to Wall Street. Pick your poison.

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But maybe we don’t have to. One other contender for the OMB post is Gene Sperling, formerly head of the National Economic Council under both Clinton and Obama.

He’s not quite Biden inner-circle, but he did a lot of the good policy work for Biden’s campaign. Sperling is no lefty. But like a good wine, he’s become better with age. His 2020 book, Economic Dignity, is a serious piece of progressive work that reads like something you’d see in the Prospect.

Sperling is far from a deficit hawk. He has held all the top economic jobs under Clinton and Obama—except OMB. So this should be a natural.

Yet another contender is Brian Deese, who was deputy OMB director under Obama—and now works for BlackRock, the world’s largest asset management company. He’s yet another Obama alum who went to the Wall Street–Washington revolving door.

But one other factor complicates this decision—diversity. All of these worthies are white guys, as are the several other top Biden White House staffers previously announced. So Biden will need to balance remaining White House senior appointments with his commitment to have a diverse administration.

One name has been prominently mentioned—Ann O’ Leary, currently chief of staff to California Gov. Gavin Newsom. She is well known to the Biden crowd, having formerly been legislative director for Hillary Clinton.

O’Leary, at least, is female. Likewise Heather Boushey, who heads the Washington Center for Equitable Growth. Both are far from deficit hawks.

Boushey will get a major job in the Biden administration, and has been tipped as either chair of the Council of Economic Advisers, or the more powerful position as director of the National Economic Council. She could also do the OMB job.

A possible Black contender is John Jones, former chief of staff to Rep. Emanuel Cleaver (D-MO) and aide to Sen. Chuck Schumer (D-NY). Jones then worked with the Congressional Black Caucus and is now vice president of government relations for the National Association of Real Estate Investment Trusts. That background isn’t exactly inspiring, though he is said to be better than the résumé might suggest.

Another notable African American who could do the job is Bill Spriggs, a contender for labor secretary. He has been chair of the economics department at Howard University, currently serves as chief economist for the AFL-CIO, and was assistant secretary of labor under Bob Reich (and serves on the Prospect board).

Reportedly, the OMB director will be named before Thanksgiving. The stakes could not be higher.

Let’s hope it’s someone for whom we can be thankful—and not another turkey.

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