Someone big got left off the list of people in Trump’s Cabinet – Washington Post

When the White House released last week a list of members of President Trump’s Cabinet, there was a noticeable absence: the chief economist of the executive branch, an exclusion that is raising concerns among some professional economists that the new administration will disregard their opinions.

While Trump’s decision is a departure from President Barack Obama’s policy, the exclusion is not a surprise in some respects. The chief economist, who is in charge of the Council of Economic Advisers, has not been in the Cabinet in most past administrations. Membership would be mostly a formality for the economist who will chair the council.

All the same, Democratic critics say removing the position from the Cabinet raises questions about how influential expert opinion will be in the Trump White House, and could complicate efforts to recruit a qualified candidate for the council’s chair. Trump has not yet nominated anyone for that position or named either of the council’s other two members.

“I do think it’s a signal, and I think the signal matters,” said Jason Furman, the council’s chairman under Obama until last month.

Furman said that because the agency’s staff typically serve brief stints before returning to academic or private-sector economics, they are somewhat independent of the political imperatives of the White House and are better able to provide the president with objective analysis and more reliable predictions of future trends.

Trump has recently said that he plans to announce a “phenomenal” tax reform in the coming weeks. With positions on the council vacant as the new president begins developing policy, Furman worries that Trump could receive unduly optimistic predictions from personal advisers about how his approach will affect the economy.

“The chances that a forecast like that is politically manipulated — rosy scenario — are much higher,” Furman said.

“The people who have been CEA chairs usually know they’re going back to their university,” he continued. “Their peer group is a pretty bipartisan group of pretty technically oriented economists, and they don’t want to embarrass themselves.”

Joseph Antos, who served as a senior staff economist in Reagan’s Council of Economic Advisers, countered that it was too early to know how Trump’s White House would treat economic policy.

He added that there have been delays in staffing throughout the new administration, not just at the council. The uncertainty around what policies Trump will support has made it difficult to find the appropriate personnel to put those policies into practice. Meanwhile, opposition from Democrats in the Senate has slowed the process further, according to Antos.

“Recruiting the right person hasn’t been easy,” Antos said.

Offering Cabinet rank could be an attractive prerequisite, said Martin Baily, who served as chairman of the council under President Bill Clinton.

“It may be hard for Trump to get a lot of good people,” he said. “If the CEA chair were in the Cabinet, it would be an inducement for a good person to take that job.”

Obama and Clinton included their chief economists in their Cabinets. President Ronald Reagan bestowed that rank on Beryl Sprinkel, the final chairman of the council during his administration.

In general, however, the council’s leaders have not been in the Cabinet. That includes Walter Heller under President John Kennedy and Glenn Hubbard under President George W. Bush, who had a powerful influence over economic policy, Furman said.

He, Antos and Baily agreed that other factors are more important than the official status of the council’s members. The economists said that formal meetings of the Cabinet are brief, infrequent and unwieldy. Trump’s Cabinet, for instance, will include 24 people. The real decisions about the country’s economy are made in more intimate settings.

Personal relationships with the president and the other members of the administration are crucial. Under Trump, those could require delicacy, Baily said. He noted that the president’s views and those of several advisers — such as chief strategist Stephen K. Bannon and economist Peter Navarro, who will be in charge of Trump’s newly formed National Trade Council — seem to be at odds with the consensus among academic economists, especially with regard to trade.

Trump has said that he wants to reduce the trade deficit, but his proposed means of doing so — tariffs and other punitive measures aimed at China, Mexico and other U.S. trading partners — might have little effect on the balance between exports and imports, most economists say.

Instead, they argue that the surest way to cut the trade deficit is to reduce federal borrowing. Investors need U.S. currency to buy bonds from the Treasury, so when the Treasury is borrowing less and selling fewer bonds, demand for greenbacks declines. The result is a weaker dollar, which favors American exporters.

Yet Trump’s other priorities — including increased spending on infrastructure and defense and massive tax relief — are likely to increase both borrowing and the trade deficit, Baily noted.

While neither Bannon nor Navarro will be members of the Cabinet, the group does include Robert E. Lighthizer, an attorney nominated by Trump for the position of U.S. trade representative and another adviser with protectionist sympathies. The White House released the roster of Trump’s Cabinet on Wednesday.

The Council of Economic Advisers will have the task of cautioning Trump on the likely effects of his unorthodox policies, Baily said, which could lead to a “particular tension” with the rest of the president’s staff.

“The nature of the Council of Economic Advisers is often to talk about things that are not going to work — policies that are not going to work well — and to be a restraint on a lot of the ideas that pop up in the White House,” Baily said. “There seems to be some disdain for expert opinion, both in Trump himself and to some extent among his advisers.”


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