By Julie Pace, Associated Press
WASHINGTON (AP) — President Barack Obama tapped labor economist Alan Krueger for a top administration post Monday as the White House scrambles for solutions to repair an ailing economy ahead of the 2012 election.
Obama announced Krueger's nomination to chair the White House Council of Economic Advisers in a Rose Garden ceremony Monday morning. The president said he expected Krueger, a former Treasury Department official and Princeton economist, to provide him with unvarnished economic guidance, not partisan political advice.
"That's more important than ever right now," Obama said. "We need folks in Washington to make decisions based on what's best for the country, not what's best for any political party or special interest."
The announcement rounding out the president's economic team comes a week ahead of Obama's highly-anticipated announcement on a new jobs initiative.
With the nation's unemployment rate stubbornly stuck above 9 percent and much of the public deeply dissatisfied with Obama's handling of the economy, the president has promised a new set of jobs proposals.
"Our great challenge as a nation remains how to get this economy growing faster," Obama said. "That's our urgent mission."
Obama has already called for an extension of a payroll tax cut that expires at the end of the year and he wants to continue jobless benefits. Aides are considering other measures, including tax incentives for businesses to hire and direct infusions of government money into construction projects. The president has said he intends to call for additional long-term deficit reduction to help pay for the short-term spending his proposals would require.
House Republicans foreshadowed their own fall agenda Monday, with Majority Leader Eric Cantor, R-Va., saying the party would focus on repealing environmental and labor regulations that GOP lawmakers say are driving up the cost of doing business and discouraging employers from hiring new workers.
In Krueger, Obama will gain an economist with expertise in unemployment and the labor market. If confirmed by the Senate, Krueger would replace previous CEA chair Austan Goolsbee, who left the administration earlier this month to return to the University of Chicago.
Goolsbee was the latest in a string of top White House economists to leave over the past year, forcing Obama to do a wholesale makeover of the economic team that came to the White House with him three years ago. Treasury Secretary Timothy Geithner is the only remaining top official left l from Obama's original economics team. Last month, the Treasury Department announced that Geithner would stay on, ending speculation he would leave the administration.
Krueger spent the first two years of the Obama administration as an assistant Treasury secretary for economic policy. In 2010, he returned to Princeton University, where he has served on the faculty for more than 20 years.
While at Treasury, Krueger worked on the popular "Cash for Clunkers" program that gave people rebates for buying new, more fuel-efficient vehicles and the HIRE Act, which gave businesses tax incentives to give jobs to the unemployed.
Krueger is likely to become an important public face for the administration on the economy. Both Goolsbee and Christina Romer, Obama's two previous CEA chairs, were frequent spokesmen for the president, appearing on television and at White House events to promote the president's policies.
That role could be even more important in the coming months, as a host of would-be Republican successors travel around the country, campaigning hard for the GOP presidential nomination by focusing, in no small part, on Obama's handling of the economy.
The national unemployment rate remains at 9.1 percent and has shown little improvement over the past year, despite the more than $800 billion stimulus program that Obama got Congress to pass not long after he took office. The depressed housing market also continues to be a drag on the economy, with fresh data out Monday showing that the number of people who signed contracts to buy homes last month fell by 1.3 percent.
Obama has also had to contend with Standard & Poor's downgrade of the U.S. credit rating earlier this year after he fought congressional Republicans for weeks for a program to slow the flow of red ink. The White House and GOP leaders ultimately agreed to a compromise deal to increase the government's borrowing authority in early August, on the cusp of default, but the S&P credit rating was lowered from AAA to AA+, nevertheless.
Appearing earlier Monday on MSNBC, Goolsbee said that "we're still in a pretty tough spot" on the economy.
"When you come out of a recession, especially one as deep as we were in, you can't just go back to do what you were doing before," he said. He said growth had picked up in 2010 but "this year we've taken some heavy blows."
Goolsbee, who is expected to play an informal role in Obama's re-election bid, said investing and focusing on the "industries of the future" are the kinds of policy directions the country needs to pursue. He also said he doesn't think that bringing another stimulus program forward is necessarily a good idea, and instead suggested tax incentives for companies to hire.
Associated Press writer Jim Kuhnhenn contributed to this report.