WASHINGTON — In tapping Alan B. Krueger on Monday to chair the Council of Economic Advisers, President Barack Obama has picked an economist well known for his studies of labor markets just as the president is about to announce a renewed push for job-creation policies as early as next week.
Among the stimulus policies Obama is considering is a temporary tax credit for employers adding to their workforce, an idea that Krueger championed in his earlier stint in the administration. Krueger was an assistant secretary and chief economist at the Treasury Department for 17 months, before he returned to his teaching post at Princeton in 2010.
A more modest version of the hiring credit became law, but congressional Republicans blocked its extension last year.
Krueger, if confirmed by the Senate, will find Republicans a force to be reckoned with against the sorts of ideas he is associated with, including a higher minimum wage. Republicans have taken control of the House since he left Washington, and party leaders say they will oppose further stimulus measures. Their focus is on spending cuts, despite widespread calls from economists, including the chairman of Federal Reserve, Ben S. Bernanke, for a more expansive fiscal policy in a period of weak economic growth and stubbornly high unemployment.
Obama, in a speech planned for next week, is expected to call for both temporary tax cuts and spending measures to spur hiring in the short term, and also long-term steps to reduce spending and raise revenues once the economy fully recovers. But in nominating Krueger, with his expertise in policies that affect job creation, Obama passed over some economists better known for deficit reduction policies, including Alan J. Auerbach of the University of California, Berkeley.
The choice of Krueger more broadly reflects Obama’s desire to strike a balance between job creation and deficit reduction after months in which congressional Republicans successfully forced action only on spending cuts. Krueger, who first joined the administration amid the recession, helped design other early stimulus proposals, including the cash for clunkers rebate for new car purchasers, the Build America Bonds program to finance infrastructure projects and a credit fund for small businesses.
“As one of this country’s leading economists, Alan has been a key voice on a vast array of economic issues for more than two decades,” Obama said. “Alan understands the difficult challenges our country faces, and I have confidence that he will help us meet those challenges as one of the leaders on my economic team.”
The ability to win confirmation in the Senate was a certain consideration; Krueger was successfully confirmed for his prior post with the Treasury. But the chairmanship of the Council of Economic Advisers is a higher position, and Republicans have become more aggressive about blocking nominees to demonstrate their opposition to White House policies.